There are two main types of liquidation preferences. First Participating vs. Non-Participating. Best for us (VCs) (worse for founders): Participating Preferred (i.e. VCs get our liquidation preferences PLUS we "double dip" and share pro-rate in anything above). Non-participating means basically that we take our pick: either the Liquidation Preference (usually amount VCs invested, sometimes though 2x or 3x etc.) or share pro-rate as if we had converted to common. So we take our pick of the higher amount
Participating Preferred: We get best of both worlds.
The Series A USV invested in was only $775,000 and was at $1/share according to privco and confirmed by docs I've seen. So how much did USV invest? Obviously Tumblr sold for over $200/share, so please do the math and show what's off? Is it a few percent, in which case what does that matter when you've made 5,000%? You should be proud of that! As a VC I'm envious Fred.
But I've found the privco data reliable (but I'm a client), so I respectfully disagree with just throwing out ad-hominem attacks. So they called out your bad bed on Foursquare. (Foursquare was just forced to borrow $41 Million and even you blogged it would be massively dilutive. PrivCo said forusquare will be out of business by year's end absent raising "massively dilutive" funding.
So I respect you, I respect PrivCo from my working with their remarkably accurate data. You shouldn't take it personally, congrats on today, and if there's something we should all know and you DIDN'T do that well, well I guess tell us. If you did even better, tell all of us on HN and even more kudos! Just don't throw out attacks though something's "wrong" when it can be wrong by a penny or by alot and either way you're technically not lying...it's beneath you and USV and us VCs, c'mon you're better than that.)
Again hats off if you did even close to what's been reported on your Tumblr preferreds.
The AirBnB model is tricky. I've had friends wire $7,000 for New Year's Eve house last weekend, then "owner" disappeared. Apparently did it to 10 other renters for same non-existent house. AirBnB refused to honor any guarantee (some technical terms of use). But I know I'd rather book a hotel. Caveat that I know other friends who love it. But seems too risky for me.
Anyone else on here been offered an "acq-hire" (ditch your startup, tech team heads off to the buyer in exchange for signing bonuses and equity?) Did you take it?
Tesla at least applied for and got loan with a WORKING CAR and CUSTOMER PREPAID ORDERS. Fisker had a 50-page BUSINESS PLAN. Tesla is NOT Fisker. Doesn't mean Tesla will succeed- current Tesla model car has some engineering issues clearly. But Tesla's not Fisker. Fisker loan was negligence, and DOE never saying a word to the public (same with Solyndra) until finally a Bankruptcy filing exposed it all: loan extensions, waivers etc to keep it quiet. That's absured...this is OUR MONEY being loaned out.
As a VC just want to point out to tech entrepreneurs (and I was one before) that whether a VC funds you ("blesses you") or not does NOT mean your idea or you and your team are worthless. Hang in there and try to achieve as many milestones as possible with as little money as possible. And it's never been more possible to do so cheaply as it is today.
Won't repeat prior post but I personally recommend not relying on crunchbase and paying for either PrivCo or DowJones VentureSource. They verify everything and as a wise man said nothing worse than no information except having bad information and thinking it's correct.
http://www.dowjonesventuresource.comhttp://www.privco.com/investors
As a VC in Silicon Valley I have tremendous respect for the Valley, but I must say (having formerly lived in LA) it sometimes feels like a 1 industry town. In L.A. every and his brother "had a screenplay." "Oh man, can you read my screen play? We're looking to raise a million for this indie film." In Silicon Valley say you're a VC and my lord the way people change, from talking to you casually to looking at you like an addict and you're a bag of heroine they desperately need.
Startups CAN actually survive and meet early milestones without us VCs you know. In Canada I'll bet it would be refreshing to "have" to meet those early milestones without being made to feel like a failure just because you're not already "funded." "Are you funded? Yeah, by who?" "You're not funded? Oh bummer." (Person walks away.)
So eventually a Canadian entrepreneur may need/want to move to Silicon Valley, but I'll bet they learn alot - and find it alot more refreshing - to start out at first without the non stop "you got a screenplay? you got an agent?" equivalent I see and hear every day and every hour in Silicon Valley.
In my experience, if you want reliable info (NOT Crunchbase nor companies who just crawl/spider them and resell it to you, you know who you are right below) use PrivCo, what I use in VC. It's reliable, confirmed with the VC firms and the startup founders. Rarely find anything off (crunchbase if way off as all the HN crew already has figured out).
Just do a search for VC firms and specify what date YOU want their last investment to be...everyone has different critera. If you think if it's been more than 6 months it's a "zombie VC" (I personally disagree, because without getting technical depends on age of the fund...a new 10-year fund invests most of its money in the first 2 years in a nutshell) then pick 6 months on PrivCo VC firm search for last investment. If you think it's 12 months search for 12 months. 18 months, search for that. Don't go by this nonsense list with arbitrary 13 month "cutoff", especially when many of these deals aren't announced - so they do have deals as evidenced from fellow HN crew discussion below missing, so the "no deal in 13 months" is wrong to begin with - you need a dedicated firm like PrivCo (or DowJones VentureSource) to diligently find those deals day after day. Just 1 missing VC deal for a firm throws off the entire "13 month zero deals" input there = output worthless.
Long way of saying search for venture capital firms in my humble opinion using PrivCo and the search criteria: last investment must be within X months, plus must have made investments in the precise sector you want, etc. Then you get the results, export to Excel, and it even has updated names and direct emails of the partners. It's a beauty. Might be others I haven't used too but this is what I personally use:
http://www.privco.com/investors
Participating Preferred: We get best of both worlds.