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Dollar Shave Club, Jet.com, and Nutanix: Paths to Exit

Path to IPOPath to AcquisitionEquityZenIPOInfographic

Ketan Bhalla   September 22, 2016

We recently published three new infographics regarding the exits of Dollar Shave Club (acquired by Unilever), Jet.com (acquired by Walmart), and Nutanix (recently set the terms and price for their IPO).   Take a look to see what these events mean for the major investors of the company - you might be surprised by some of the outcomes.

We regularly publish these infographics to help illustrate the impact of funding rounds for early investors in an effort to "demystify" startup funding.

Dollar Shave Club

Unilever agreed to buy Dollar Shave Club for $1 billion in July of this year.  According to Unilever, part of the reason they bought the company was for their "unique consumer and data insights" and because they believed Dollar Shave Club was the "category leader in its direct-to-consumer space".  Forerunner Ventures, who lead the company's seed round, will realize a 49.7x return when the deal official closes.  See full infographic here.  


Jet.com was acquired by Walmart for over $3 billion.  The deal officially closed this past Monday - Doug McMillon, President and CEO of Walmart, announced the official closing via a blog post on the company's website.  The acquisition resulted in a 9.2x return for investors in Jet's Series A round, including New Enterprise Associates which acted as the lead investor in the round.  See full infographic here.  


Nutanix officially priced their IPO on Monday, setting a range of $11 to $13.  At the midpoint of the range, the $1.64 billion valuation at IPO would be slightly lower than the valuation of the company in August 2014, when they last raised funding.  Assuming the midpoint of the pricing range, the Series D investors would recognize a 2.5x return on their investment at IPO.  See full infographic here.

Accel and Atlassian: Tech Monogamy at Its Best

Path to IPOInvestorAccelIPO

Phil Haslett   December 10, 2015

In Silicon Valley, it’s all about your brand.

A venture capital firm’s brand and reputation are particularly important when it comes to deal flow. And so it should come as little surprise that Accel Ventures was flying high in 2010:
Accel was Mike Tyson in Mike Tyson's Punch-Out for Nintendo. And it's good to be eponymous with Mike Tyson's Punch-Out.

Fifteen hours and 7,419 miles away......
Atlassian founders Michael Cannon-Brookes and Scott Farquhar were quietly building a software empire in Sydney.

Not just a software empire, but a bootstrapped one at that. Thanks to a cheaper source of engineering talent (Aussie developers earn 23% less than their San Francisco brethren) and a salesforce-free distribution channel (75% of sales are generated directly from their website), Atlassian had just celebrated its 5th consecutive year of profitability in 2010. They had 11,000 paying clients. Life was good.

As it turns out, Atlassian's growth was not so quiet at all. Accel had actually been tracking the company's explosive growth from a distance, noting that "the vast majority" of their portfolio companies were paying for Atlassian's products. 

And Rich Wong, an Accel partner, did what Accel had to do to invest: he leveraged Accel's brand. Quietly, Accel and Atlassian announced a $60 million investment in July 2010. No valuation was discussed.

And Atlassian never took another Silicon Valley dollar leading up to today's IPO.

Show me the money

We had to know: how much money did Accel Partners, the only venture capital firm to invest in Atlassian before the IPO, really make?

Channeling our inner Michael Burry, we dove into Atlassian's recent filings to shed some light on Accel's initial investment of $60 million.

Based on EquityZen's analysis, Accel paid $2.23 per share of preferred stock in 2010, which would correspond to 26.9 million shares (based on the $60 million investment).

At the time of the IPO, Accel owns 23.468 million shares (data here). Additionally, it's noted in Atlassian's F-1 filing (similar to an S-1, but for foreign companies) that Accel sold shares in a tender offer to T Rowe Price and Dragoneer Investments in March 2014:

from Atlassian's F-1 Filing
If we assume that the difference in shares owned by Accel between 2010 (26.9 million) and at the time of the IPO (23.468 million) is the number of shares that Accel sold into the tender offer, then Accel already made:

3,437,480 shares sold * $16.00 per share = $54,999,674

Effectively, Accel got almost all of their initial money back ($55 million vs their $60 million investment) by selling the 3.4 million shares last year.

The remaining shares, at a $21 share price, will bring $493 million in value for Accel. 

All in all, the investment will return 813% in less than 6 years. And no other VC will be able to tout that. 

And that's why it's all about your brand.

Pure Storage: The Path to IPO ($PSTG)

Path to IPOIPOInvestorVenture CapitalStartup

Phil Haslett   October 08, 2015

Pure Storage, a flash-storage company backed by venture investors Sutter Hill, Greylock Partners, Index Ventures, and Tiger Global, started trading on the public markets yesterday.

As we've done in the past, we took a look and visualized how pre-IPO investors did. We asked a few questions:

  • What level of return did early investors generate?
  • How did the last private investors do?
  • Who are the big winners?

Way to go, Sutter Hill Ventures!

It's a good day to be a limited partner of Sutter Hill Ventures. The Palo Alto based venture firm owns 27% of the company, worth $745 million at the $17/share IPO price.

Sutter Hill should be rewarded for its early belief in Pure Storage: they led the company's $5 million Series A funding round 6 years ago, at $0.21/share (good for an 8000% return).

Ho-hum returns for late-stage investors

Assuming that Pure Storage continues to trade at $17/share, the last private investors (Wellington, To Rowe Price, and Tiger Global) will generate an 8% return. While that may sound decent, it probably doesn't justify the risk that those investors saw in the investment when they put over $200 million into Pure Storage's Series F financing in April 2014.

We got it right! (Sort of)

EquityZen used historical IPO and venture data to predict the Pure Storage IPO back in early September. We predicted:

  • a $522 million IPO (Pure Storage raised $500 million)
  • a $21.86 share price (Pure Storage priced at $17 per share)
Hey, 1 out of 2 ain't bad.