http://www.markevanstech.com/2005/09/17/skypes-investors-its-good-to-be-a-vc/ Insight and Analysis from North of the Border Fri, 05 Dec 2008 08:11:52 +0000 http://wordpress.org/?v=2.6.1 http://www.markevanstech.com/2005/09/17/skypes-investors-its-good-to-be-a-vc/#comment-598 Anonymous Fri, 08 Sep 2006 05:21:13 +0000 http://markevanstech.com/?p=932#comment-598 Fuckers. Why should I stay with a company that arbitrarily expires credits. I thought you guys were cool, but you turned out to be some corporate assholes with no clue about how to hold onto customers. I'm going to find a way to get this message to your vc so that you shrivel and die, shitheads. Fuckers. Why should I stay with a company that arbitrarily expires credits. I thought you guys were cool, but you turned out to be some corporate assholes with no clue about how to hold onto customers. I'm going to find a way to get this message to your vc so that you shrivel and die, shitheads.

]]> http://www.markevanstech.com/2005/09/17/skypes-investors-its-good-to-be-a-vc/#comment-597 blogger_brent Mon, 19 Sep 2005 19:11:21 +0000 http://markevanstech.com/?p=932#comment-597 The reality is that VC deals can be complicated as to valuation (1-2x preferences on the original money is still common to manage downside risk, for instance). So the math you are doing is purely hypothetical. It is not unusual to see investors (VC and angel) own greater than 60% of a company post a few investment rounds... especially when close to $20M is raised. Google didn't fit that mold because they only raised a few million from VCs (I think Moritz said $2M) before becoming profitable. Valuation tends to rise dramatically after profitability. Bottom line... 100X is not un-reasonable here. A hell of a lot better than if they had held and tried for an IPO in 2 years... The valuation multiple would not have been anywhere near what eBay paid. The reality is that VC deals can be complicated as to valuation (1-2x preferences on the original money is still common to manage downside risk, for instance). So the math you are doing is purely hypothetical. It is not unusual to see investors (VC and angel) own greater than 60% of a company post a few investment rounds… especially when close to $20M is raised. Google didn't fit that mold because they only raised a few million from VCs (I think Moritz said $2M) before becoming profitable. Valuation tends to rise dramatically after profitability. Bottom line… 100X is not un-reasonable here. A hell of a lot better than if they had held and tried for an IPO in 2 years… The valuation multiple would not have been anywhere near what eBay paid.

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