3 ms·
Actually, if we assume that Heroku's post-money valuation in their first round of financing was $10m (reasonable since they raised $3m) and that they took a 30%
by wheels 16y ago
Actually, if we assume that Heroku's post-money valuation in their first round of financing was $10m (reasonable since they raised $3m) and that they took a 30% dillution hit each time, this would have returned $2.88m to someone that got in on these terms, or not even enough to cover the investments for that batch.
So either the homeruns have to be further out of the park than Heroku or (as is likely) the median return needs to keep things in balance a bit more.
- mlinsey 16y agoThe assumption has to be that Milner will participate in follow-on rounds for companies that look like they will be Heroku or bigger.
- wheels 16y agoI wonder if there's a clause that requires the ability to participate in later rounds. That would make more sense. Otherwise it's not clear that they'd be able to. Heroku raised $3m a month after demo day; I'm not sure what it would have taken for an angel to be able to get into that round.
- pg 16y agoAll convertible notes convert into shares with the same rights as the shares sold in the equity round in which they convert. These invariably include pro-rata rights.
- billclerico 16y agoI believe a lot of pro rata rights have minimums (i.e. you have to have at least 500,000 shares) to have that right. most series a term sheets that I've seen have set the minimums above any threshold that an angel would meet
- pg 16y agoI know the actual numbers for Heroku, and in that YC batch investors pursuing Ron and Yuri's strategy would have been net ahead on Heroku alone. And that batch also included 280 North, which has already been acquired for a significant amount, and several other startups which are likely to generate returns at some point.
- jacquesm 16y agoHow does it work out for all YC companies that have run and either exited or died to date?
- deleted 16y ago[deleted]