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Just out of curiosity, how do people who invest at $25B valuation expect to make money? Are they okay with it going from $25B to $50B and getting 2x, or are th
by steven2012 12y ago
Just out of curiosity, how do people who invest at $25B valuation expect to make money? Are they okay with it going from $25B to $50B and getting 2x, or are they also looking for 10x+ return?
- _sentient 12y agoThe expected returns on late stage investments are much lower, which is proportionate with greatly reduced risk. Nobody is betting that Uber will return 100x from this point.
- prostoalex 12y agoInvestors usually get preferred stock, which sometimes comes with * liquidation preferences * dividends payable upon liquidity events (with their own liquidation preferences) * board seats * pro rata rights with future rounds Depending on specific type of investor, some of these things turn out to be super-important compared to others. A lot of late-stage also is facilitated by wealth management arms of large investment banks, and is a way for their clients with net worth of $1m+ to get in on the deal before the IPO, at which point even marginal returns are acceptable. A Google query with terms "Facebook IPO", "date: 2012", "private market", "regretted" sheds some light on that.