Loopt acquired by payment card provider for $43.3m in cash
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Re: Loopt acquired by payment card provider for $43.3m in cash
#2I am very curious how YC makes out in a deal like this - when there is 17M of capital invested after them in A and B rounds if there was any sort of liquidity preference you can pretty much guarantee YC didn't see a dime. (especially since 9M of this was retention for employees which makes me think that the employees weren't going to make anything from their equity/shares)
Re: Loopt acquired by payment card provider for $43.3m in cash
#3I think Loopt made an error in partnering exclusively with carriers. I remember when I was in the UK and heard of loopt the first tifme. I visited the site and was told to put in a US number. It was there they lost it.
I am really looking forward to what Sam has up his sleeves now that he is free.
Re: Loopt acquired by payment card provider for $43.3m in cash
#4I think Loopt made an error in partnering exclusively with carriers. I remember when I was in the UK and heard of loopt the first tifme. I visited the site and was told to put in a US number. It was there they lost it. I am really looking forward to what Sam has up his sleeves now that he is free.
I had a very similar experience. I heard about Loopt on here when they first launched. It seemed really interesting and I wanted to sign up but it was only for Boost Mobile at the time, which neither I nor any of my friends used.
I just shrugged and closed the tab.
Re: Loopt acquired by payment card provider for $43.3m in cash
#5I am very curious how YC makes out in a deal like this - when there is 17M of capital invested after them in A and B rounds if there was any sort of liquidity preference you can pretty much guarantee YC didn't see a dime. (especially since 9M of this was retention for employees which makes me think that the employees weren't going to make anything from their equity/shares)
Assume they got 5% of the company for $20k.
It's very plausible they walked with between $500k and $1m. That's an awesome return on $20k.
Re: Loopt acquired by payment card provider for $43.3m in cash
#6I think Loopt made an error in partnering exclusively with carriers. I remember when I was in the UK and heard of loopt the first tifme. I visited the site and was told to put in a US number. It was there they lost it. I am really looking forward to what Sam has up his sleeves now that he is free.
In 2005, there was no other choice but to work directly with the carriers if you wanted your software widely distributed on mobile phones. At the time, Sam was acknowledged for having the chutzpa to go negotiate directly with the carriers and succeed.
Re: Loopt acquired by payment card provider for $43.3m in cash
#7I am very curious how YC makes out in a deal like this - when there is 17M of capital invested after them in A and B rounds if there was any sort of liquidity preference you can pretty much guarantee YC didn't see a dime. (especially since 9M of this was retention for employees which makes me think that the employees weren't going to make anything from their equity/shares)
Assume they got 5% of the company for $20k. It's very plausible they walked with between $500k and $1m. That's an awesome return on $20k.
Not how it works since with later rounds you have both dilution and probably a liquidity preference
The figures here work out almost exactly to Sequoia and NEA getting their 2x (they invested a combined $17M) and plus the employee pool (2 x $17M = $34M + $9.8M = $43.8 - the announced sale price was $43.4M)
That is just me speculating, but I would be surprised if it isn't far off.
Re: Loopt acquired by payment card provider for $43.3m in cash
#8Earlier quoted context omitted.
Assume they got 5% of the company for $20k. It's very plausible they walked with between $500k and $1m. That's an awesome return on $20k.
Not how it works since with later rounds you have both dilution and probably a liquidity preference The figures here work out almost exactly to Sequoia and NEA getting their 2x (they invested a combined $17M) and plus the employee pool (2 x $17M = $34M + $9.8M = $43.8 - the announced sale price was $43.4M) That is just me speculating, but I would be surprised if it isn't far off.
YC doesn't have any anti-dilution clauses in their terms?
Surprising given their small stakes. All I've seen are the surface features of the YC deals, so I'm not up to speed on the specific terms they get.
Re: Loopt acquired by payment card provider for $43.3m in cash
#9In case anyone is missing what has happened here, this is why people hate on private equity/VC.
As far as I can tell, Loopt wasn't doing very well. http://www.google.com/insights/search/#q=loopt.com&cmpt=... They had an attempt to revive the company to compete with Groupon last year that many here thought was stupid and died an early death (http://news.ycombinator.com/item?id=2696412)
Michael Moritz (Sequoia partner) is still on the board of Green Dot, now a publicly traded company worth north of a billion dollars. Almost the entire board (http://ir.greendot.com/phoenix.zhtml?c=235286&p=irol-gov... ) is Private Equity/VC guys, they do this kind of inside baseball all the time, it's no sweat off their back to do Moritz a favor.
He convinces Green Dot to acquire Loopt for a huge amount of cash (Green Dot was sitting on $225 million in cash). Sequoia makes a cool $15 million.
Related: the always-informative Planet Money did a special on Private Equity and you can see how Bain Capital got its money back on a company that went bankrupt: http://www.npr.org/blogs/money/2012/02/23/147257517/how-mitt... TL;DR the company they bought acquired another company and raised significant debt- they used that debt to pay back Bain Capital.
Re: Loopt acquired by payment card provider for $43.3m in cash
#10"It also helps that Sequoia is an investor in both Loopt and Green Dot, of course."
That makes more sense now. I was wondering how the talks got started.