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I was curious how this compared to other acquisitions in terms of ROI for the investors. Here are a few I drummed up (from Crunchbase):

  Groupon:   171m  => 5b    = 30x
  YouTube:   11.5m => 1.65b = 145x
  MySpace:   21m   => 580m  = 27x
  AdMob:     47m   => 750m  = 16x
  GeoCities: 40m   => 2.87b = 71x


Maybe I don't understand these investments but I don't think that makes any sense. Presumably the 171m that's been invested in Groupon hasn't bought the whole company, only a proportion of it, so the investors only get that same proportion of the 5bn. For example if that 171m represents only 10% of Groupon's shares then the investors only get 500m back; a 3x return rather than a 30x return.


While true, I doubt investors own only 10% of Groupon, especially not at a $171M stake. Groupon had (at least) two cash injections, one for $1M in seed money, the other for $135M. The last round was for 10%, which gave them a $1.35B valuation in April.

Some reading: http://www.forbes.com/forbes/2010/0830/entrepreneurs-groupon...




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