Hamid: 15-year hold on a 70x multiple deal yielded only 15% IRR
Mamoon Hamid · Mamoon Hamid: AI - Where Value Accrues, Startups vs Incumbents & Scaling Laws | E1217 · 20VC with Harry Stebbings · Oct 21, 2024 · at 30:56
Mamoon Hamid, General Partner at Kleiner Perkins, recalls an early investment at USVP in Steve Flagg's company that sold to Siemens for $700 million.
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“There's one investment I remember doing early days of USVP, Where we did it at, I think, TenPost. And it was a three million dollar check for like 30% of the company. And that company, about a year and a half ago, the founder CEO, Steve Flagg, still a friend, amazing guy they sold it to Siemens for seven hundred million dollars. And that ended up being, you know, that's seven, 70 x. Crazy multiple, right? Some ridiculous multiple. But you know, When you hold on to something for 15 years guess what the IRR on that investment was? If you took, if you still owned, let's say, 25% of that company at seven hundred million, so like a hundred and something, a hundred 70,000,003 million becomes a hundred seventy million, or something like that, or. That's a great multiple but the IRR over 15 years looked more like, I think it was like 15%.”
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