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They can mark to market, but until the cash comes in, you just don't know. The article differentiates this. Sequoia’s 2010 fund is up 5.5 times and, unlike ot
by mathattack 10y ago
They can mark to market, but until the cash comes in, you just don't know. The article differentiates this.
Sequoia’s 2010 fund is up 5.5 times and, unlike other venture funds that are mostly sitting on paper gains
It's very hard to value equity when there are funky things (preferences, participation, etc) in the cap tables. Any given "valuation" is higher for some and lower for others, and in a hard to quantify way. And a "valuation" based on selling 3% of a company is very different than 50%. But... The values are non-zero. And the company needs to provide something that's better than no information to investors in the interim.
- staticautomatic 10y agoSure, for Sequoia. But the next paragraph says Benchmark, for example, "has multiplied investors’ money 11 times net of fees in its 2011 fund...It includes blockbuster investments like Uber Technologies Inc. and Snapchat Inc." to which all I can say is...maybe on paper. My point is that the gains are unrealized until you get the actual money. So "multiplied 11 times" is only true of the monopoly money. Whether it's true of the realized gains remains to be seen.
- mathattack 10y agoThe chart also shows realized versus unrealized. It's analogous to GAAP accounting. GAAP accrual based earnings are good, but until you see the cash, it's just a best guess.
- deleted 10y ago[deleted]
- mathattack 10y agoIt appears that a16z agrees with you in their rebuttal. :-) http://a16z.com/2016/09/01/marks-offmark/ http://a16z.com/2016/09/01/marks-offmark/