VC Funding Spelled Backwards

http://mattmaroon.com/?p=361

by breily • 18 years ago

42 11 18 years ago

mattmaroon.com

simianstyle• 18 years ago

gnidnuF CV

Sorry, but i've been holding myself back from doing that for about half an hour now. I caved.

mattmaroon3• 18 years ago

Whoops, clicked the down arrow but meant to click up. For what it's worth, consider yourself +2 karma.

zurla• 18 years ago

the MS offer was not that high when you factor in how many people work at xobni. i've heard some tech acquirers say they initially value a startup at $1M per engineer before factoring in the value of the actual product. xobni is up to what, 14 or 15 people now?

aston• 18 years ago

15 people, all engineers?

rms2• 18 years ago

I'd actually be really curious what their engineer to executive to support staff ratio is.

boris• 18 years ago

"Had Xobni taken $1 million instead of 4, they’d all be buying beach houses right now. On the other hand, Microsoft might come back and offer the $40 or $50 million it would take to make the VCs agree (I think it would be a good idea for them to do so) and they’ll be buying beach house and Bentleys."

Let's say an angel would invest at the same valuation as the VC, then for $1M they would get 12.5% of the company. That would mean that when acquired for $20M, founders are left with $17.5M. For VCs with 50% stake and $40M acquisition founders are left with $20M. Not sure where Bentley's come from.

utnick• 18 years ago

you overestimate the price of bentleys

mattmaroon3• 18 years ago

Angels would have invested 1m at a lower valuation than VCs. That's both the perk and the drawback of VC money. You can get more while giving up about the same amount of equity.

Fuca• 18 years ago

Why MS just not go ahead and copy Xobni? it is not like they would need to get users, they are already there.

VC Funding Spelled Backwards

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