by andrewlapp
According to wikipedia, Advance Publications is owned by “the Newhouse family”.
I also looked into Tencent prior to this post. I didn’t feel it would be fair to give this breakdown in the image though because I didn’t break down any of the VC firms either.
Tencent ownership:
- largest shareholder 31%: Prosus (Netherlands)
- minority shareholder at 8.5%: co-founder Hua Teng Ma (China)
History of investment and acquisition:
- October 2006: Condé Nast Publications acquired the site www.nytimes.com/2012/09/03/business/media/reddit-thrives-after-advance-publications-let-it-sink-or-swim.html
- Series B, 10% to various American venture capitalists (5 + 1 lead) and 10 American individuals www.crunchbase.com/funding_round/reddit-series-b–662ba273
- Series C, 11.1% to 8 American venture capitalists, one Dubai VC, and one individual www.crunchbase.com/funding_round/reddit-series-c–168f04d0
- Series D, 10% to Tencent, and three American Venture Capitalists www.crunchbase.com/funding_round/reddit-series-d–c9282e50
- this round was led by Tencent, they got 5% of the round www.theverge.com/2019/2/11/18216134/reddit-tencent-investment-deal-memes-amount-winnie-the-pooh-tank-man-china
Assumptions
- In reddits series B and Series D half the capital was provided by the lead. We assume that the series C approximately follows this rule.
- We assume that the rest of the non-lead investors split the remaining amount roughly evenly.
- We assume approx. 100% of shares were purchased and roughly 0% of the shares have been provided as compensation since acquisition by Conde Nast (AP).
- We assume that none of the shares have been transferred. Investors selling illiquid pre-IPO shares is atypical. www.quora.com/Is-it-possible-or-relevant-for-a-seed-investor-to-sell-his-shares-of-a-startup-to-a-series-A-or-series-B-investor/answer/Gil-Silberman
Breakdown by round:
- Conde Nast (AP) 100% acquisition
- was diluted by 10%, 11.1%, then 10% (multiply by 0.72)
- Series B lead VC: 5%, individuals: 2/3 * 5%, other American VCs: 1/3 * 5%
- Diluted 11.1% by series C, then 10% by series D (multiply stake by 0.8)
- Series C lead VC: 1/2 * 11.1%, individuals: 1/18 * 11.1%, Dubai VC: 1/18 * 11.1%, American VCs: 7/18 * 11.1%
- Diluted 10% by series D (multiply by 0.9)
- Series D: 5% Tencent, 5% American VCs
- No dilution yet (multiply by 1.0)
Calculations:
- Conde Nast (AP): 100% * 0.72 = 72%
- American VCs: (5% + 1/3 * 5%) * 0.8 + (1/2 * 11.1% + 7/18 * 11.1%) * 0.9 + 5% * 1.0 = 19.21%
- American individuals: (2/3 * 5%) * 0.8 + (1/18 * 11.1%) * 0.91 = 3.23%
- Dubai VC: (1/18 * 11.1%) * 0.9 = 0.56%
- Tencent: 5% * 1.0 = 5%
- Sum: 100%
Chart made with meta-chart.com
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