![]() ![]() This is common enough that these rounds are often referred to as “party rounds.” Startups can end up with as many as five or six different VCs in their cap table. ![]() Typically when early-stage investors put cash into a company, they want to bring on additional investors to drum up more buzz and validate their investment. Sequoia’s success was built on its exclusive partnership with WhatsApp founders Brian Acton and Jan Koum. It was also a big win for Sequoia Capital, the company’s only venture investor, which turned its $60M investment into $3B. Semiconductor Manufacturing International (SMIC)įacebook’s $22B acquisition of WhatsApp in 2014 was the largest private acquisition of a VC-backed company ever at the time.Earn-outs (such as those that apply to, for example, Stemcentrx) and lockups are not factored into those calculations. Note: Unless specifically stated, the “returns” discussed in the sections below are calculated based on the nominal value of the company at IPO or at acquisition. Below, we’ll show you our analysis on each specific case. To do so, we pulled data and information from web archives, books, S-1s, founder interviews, the CB Insights platform, and more.įor each company, we dove into the remarkable numbers they posted before their IPOs and acquisitions, the driving factors behind their growth, and the roles of their most significant investors. We analyzed 45 of the biggest VC hits of all time to learn more about what those home runs have in common. Getting valued at a billion or more does nothing for our model.” “If you do the math around our goal of returning the fund with our high impact companies, you will notice that we need these companies to exit at a billion dollars or more. Those wins often make up for all the losses and then some - they “return the fund.”įred Wilson of Union Square Ventures (USV), also a Smart Money VC, has written that, for USV, this translates to needing at least two $1B exits per fund: Likewise, VCs swing hard, and occasionally hit a home run. ![]()
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