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Mint acquisition still good for Series C lead

Someone asked me why the Series C lead investor would be happy with a $170MM acqusition of Mint.com

Financial trends and news by Lorenzo Carver
September 14, 2009 | Comments (1)
Short URL: http://vator.tv/n/a93

  DAG Mint.com IRR Fund Calculation Variables from Liquid ScenariosThis is my two minute answer to why the lead investor in Mint.com's Series C round, DAG Ventures, would be happy with a $170MM acquisition just a month or so after investing in the company. 

I was asked the question because, according to an article by Michael Arrington on Crunchbase, the post-money value of Mint.com was $140 million when DAG led the Series C round less than a month ago.   

I generated some outcomes very quickly using data on Crunchbase and information at Sharespost.com plugged into Liquid Scenarios and got a solid answer.  These are very rough estimates, but once Intuit files the definitive agreement in an 8K, I'll be sure to update the information if better source data is available.

At $170 million, our 2 minute Liquid Scenarios model has Series C holders getting:

1.  12.9% of proceeds 

2.  That's a cash-on-cash multiple of approximately 1.48X to 1.49X the original investment

3.  Assuming the transaction closes on November 1st, Liquid Scenarios generates very attractive estimated IRRs (Internal Rates of Return) for DAG's limited partners on this investment

        a.   A gross effective IRR of 463% for DAG LPs on 11/1/09

        b.   A net effective IRR of 313.64% (That's net of a 2% management and 20% carried interest)

        c.   The earlier you assume the transaction close, the larger the estimated IRR / return

 

These are two minute system generated estimates from very, very limited information on the web.  Please feel free to chime in with better estimates or outright challenges to the calculations.  I've included a couple of charts output from Liquid Scenarios that may help your efforts.

 

Either way, I think that answers the question as to "why" $170 million is attractive to an investor that just bought in at a $140 million post money valuation.  A 1.49X return is at least a triple digit IRR return when you realize it in just a few months.

 

 

 

 

 

 

 

All images generated by Liquid Scenarios and Search2Model. 


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Lorenzo Carver
CEO,
Liquid Scenarios
Bio:     Lorenzo Carver, MS, MBA, CPA/ABV, CVA, is the inventor of bpCentral's Carver Import Algorithm, which enables impo...

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Michael Edwards, on September 15, 2009

Good analysis on how positions close to breakpoints can be different than expected.


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