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Generally the multiple expected is lower for later stage rounds as there's less risk. Also Sequoia wouldn't have got anywhere near 35%. That said the investors
by ig1 12y ago
Generally the multiple expected is lower for later stage rounds as there's less risk. Also Sequoia wouldn't have got anywhere near 35%.
That said the investors would certainly be looking for >$1bn exit.
- nickstinemates 12y ago> Also Sequoia wouldn't have got anywhere near 35%. Bingo! I don't think anyone would be interested in taking a round that would dilute us this much, especially when the need for money is not pressing.
- sillysaurus3 12y agoThe smaller the percentage, the higher the expected acquisition price. For a 10% ownership stake from a $40M investment, the acquisition would need to be $4B just to earn 10x their money back. I was just wondering about some scenarios where Docker could achieve that kind of price.
- nickstinemates 12y agoYou haven't taken in to consideration an important variable - how much of the 40M is invested by Sequoia vs. pro rata by existing investors.
- spullara 12y agoThis doesn't actually matter assuming the 40m bought 10%.
- benologist 12y agoWhy does that matter, the other investors are hoping for returns too?
- nickstinemates 12y agoI was talking specifically about the equation, not about the expected returns of investors.
- benmathes 12y agopreferred vs common, participating preferred vs common (i.e. liquidation preference), possible pro-rata rights (thought at this stage further financings are probably unlikely) disclaimer: I work at greylock, who was an earlier investor, though have _zero_ inside knowledge of the deal as I work on unrelated stuff.