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Parakey: Did Investors Get Left Out In The Cold?
- aston 19y agoParakey had an incredible number of people involved in their angel round. I'm sure almost no one had a substantial (money-wise) investment in these guys. The early exit was probably somewhat disappointing relative to what could've been a huge late exit, but you can't be too sad doubling up that fast. In other news, Facebook has $4million in cash to hire two people with??
- karzeem 19y agoDoubling your investment in six months is pretty good, but VCs would much rather wait three or four years and get 20 times their investment. Since it's a minority of companies that turn a profit for their investors, a Parakey-scale success is not the kind of thing that VCs dream about. $4 million is probably less than Sequoia invests in most of its companies, so it's certainly less than they're hoping to get out. If they turned a $2 million profit, that's a piddling 1% return for a $200 million fund. This is a really interesting case of founders turning the tables on VCs. When there's a lop-sided outcome, it's usually, from what I gather, the VCs who come out on top. I wonder how much of the uniqueness of this had to do with Blake and Joe's high profile (and their presumably resultant ability to get unusually favorable terms from investors).
- augy 19y agoPG: as an investor, how do you feel about this?