Fred Wilson, PrivCo’s Report On Tumblr Deal Is Total Garbage

by Kyle in Everywhere Else, Funding, New York, Startup News, Venture Capital
0 Comments 0 Like 2,687

Fred Wilson, New York, Tumblr, PrivCo, YahooFred Wilson, who some consider the godfather of New York venture capital, made some money in the Tumblr deal. However he is quick to point out that a PrivCo report that suggested his firm, Union Square Ventures, netted a 5,000% return is “total garbage” Business Insider reported late Tuesday.

PrivCo is a private firm that reports on startups and they claim that they had access to details of exactly how much everyone made in the landmark $1.1 billion dollar deal between Yahoo and Tumblr.

Wilson took to Hacker News where he said “Total garbage. There is not one fact in this privco thing that is close to right. The numbers are good but nowhere close to that good. This is the same firm that predicted Foursquare would be out of business this year which will also prove to be nonsense.”

Time Magazine is reporting the Privco data, that Tumblr founder David Karp is taking home $253 million dollars in the deal. They’re also reporting that on a combined investment of $5.25 million dollars over 2007 and 2008, and in conjunction with Boston based Spark Capital Union Square Ventures saw a return of 50x which was worth $253 million to USV and $231 million to Spark.

Privco also suggests that Sequoia yielded $176 million and a combined, Greylock Partners, Insight Venture Partners, CrunchFund and Draper Fisher Jurveston made $88 million.
Wilson has not revealed what the actual numbers are, and probably won’t which could make this information just a shot in the dark.

Another early Tumblr backer, Bijan Sabet said on Twitter that the PrivCo report was “complete garbage and incorrect”.

Now check out Fred Wilson’s Venture Capital Do’s & Dont’s

New York Gets Billion Dollar Exit With Tumblr

by Kyle in Everywhere Else, Featured, Funding, New York, Startup News, Yahoo
2 Comments 0 Like 2,736
Tumblr, Yahoo, David Karp, Marissa Mayer, Acquisition, Exit

Tumblr founder David Karp onstage at TechCrunch Disrupt 2011 (photo: K. Sandler for Thedroidguy.com)

This was the big startup news all weekend. At the end of last week, rumors started bubbling up via AllthingsD suggesting that Yahoo, and it’s new powerhouse CEO Marissa Mayer was looking for their biggest startup acquisition to date. That startup was Tumblr.

Last week we started hearing that Yahoo was prepared to buy Tumblr for $1 billion dollars. Many tech and startup pundits suggested that Facebook may try and jump in and swallow up Tumblr before the Yahoo board could get together Sunday and vote on the acquisition. Facebook reportedly, never made an offer.

In case you’ve been living out in the wilderness without internet access, Tumblr is a microblogging platform. They have over 100 million monthly visitors and see over 90 million posts made per day.  Unlike the 140 character restriction on Twitter, people posting to Tumblr can write longer formatted posts and include pictures, videos etc.

Coincidentally Tumblr, and it’s founder David Karp, were the subjects of my most widely read story ever in my career is a “blogger”. Tumblr is just that popular.

Karp has been swatting off offers to buy Tumblr almost since it’s inception. Celebrities like Lady Gaga and others, flocked to Tumblr to add to their social media strategies. In fact GaGa actually posts on her own Tumblr, whereas her Facebook page is updated by a social media team.

The Wall Street Journal, and several other credible sources, have said that Yahoo’s board approved a $1.1 billion dollar acquisition of Tumblr. Many sources speculate that Mayer, a 13 year veteran of Google, hopes that Tumblr will be Yahoo’s YouTube.  It’s also been reported that, for now, Tumblr will operate as it’s own business unit, and continue to be based in New York.

There are no solid revenue numbers for Tumblr reported online. What has been reported is that the startup, that was founded in Karp’s mom’s small New York apartment in 2007, has raised $125 million in venture capital and at one point Karp sold 25% of the company for$750,000. It’s unclear how much Karp still owns today.

Karp, along with girlfriend Rachel Eakley, a grad student and chef, lived in a modest west village apartment until last year when they moved into a $1.6 million dollar loft in West Brooklyn. Karp dropped out of high school, finishing up his education on his own and then moved to Japan where he coded for a living.

There’s no official word of how long Karp will remain with the company.

New York even has a ping pong startup!

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