alarm:clock

News & Updates - Tuesday, October 10, 2006

Sequoia's Roelof Botha Brings Home The Bacon With YouTube Deal

Many moons ago, when we were raising funding for an Internet company and had a number of interested VC firms, Sequoia stood apart because it wanted to be the sole founder. Sequoia took this approach with YouTube and has seen the dividends in spades.

The connection between Sequoia and YouTube can be traced back to founders Steve Chen's and Chad Hurley's days at PayPal. After PayPal was bought by eBay, the two launched YouTube. In the summer of 2005, the pair showed their site to the CFO at Paypal, Roelof Botha. Botha was at that point a partner at Sequoia. In November 2005, he agreed to invest $3.5M in YouTube. Five months later, Sequoia put an additional $8M into the start-up. [Confusing the matter somewhat is that Artis Capital Management, a hedge fund in San Francisco was also investor in YouTube, says PE Week.]

Sequoia invested a total of $11.5M in YouTube from November 2005 to April 2006. It may be walking away with more than 43x that amount. Its stake in YouTube has been estimated at roughly 30%, which would give it a value of $495M.

Read - Venture Firm Shares a YouTube Jackpot (NY Times)
Read - GoogTube is happening for $1.65B - and I understand why Chad could not attend tomorrow's Search SIG (Jeff Clavier)
Read - How They Did it (Fred Wilson)

Sequoia recently relaunched their Web site with this Scrap Book