Sunday, February 27, 2005
Signs of the Apocalypse
The Business Week VC Blog points to overheated private equity and "gargantuan" VC deals as harbingers of doom. That and the need for VCs to invest or return management fees (via Bob Cringely) is going to push investing returns down and maybe fuel another bubble.
Interesting that one of the large VC deals referred to was the pre-IPO of Fastclick.
"Three months before FastClick filed its S-1, the company closed a $75 million recapitalization financing led by VC firms Highland Capital Partners, Oak Investment Partners, and Steamboat Ventures (Disney's VC arm). About $55 million of that haul went toward buying 1.6 million FastClick shares directly from the founders, employees, and previous investors. Before the recap, the founders owned most of the company since FastClick had raised only $400,000 of VC since inception in 2000. Pryor and Gross walked away with $21.8 million and $10.4 million, respectively."
Wow - nice way to cash out without all the headaches of an IPO and roadshow.
Kudos to these guys who got there with only $400k of VC money.
Interesting that one of the large VC deals referred to was the pre-IPO of Fastclick.
"Three months before FastClick filed its S-1, the company closed a $75 million recapitalization financing led by VC firms Highland Capital Partners, Oak Investment Partners, and Steamboat Ventures (Disney's VC arm). About $55 million of that haul went toward buying 1.6 million FastClick shares directly from the founders, employees, and previous investors. Before the recap, the founders owned most of the company since FastClick had raised only $400,000 of VC since inception in 2000. Pryor and Gross walked away with $21.8 million and $10.4 million, respectively."
Wow - nice way to cash out without all the headaches of an IPO and roadshow.
Kudos to these guys who got there with only $400k of VC money.
