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Stewart Alsop, of Alsop Louie Partners, explains why he had to "convince" a CEO at one one of his portfolio companies to turn down an acquisition offer even though it would have produced a 3x or 4x return in about a year.
"That's not what we're here for. We want to invest in major enterprises that create real value," which he defines as a valuation starting between $250 million and $750 million, depending on whether his company owns 30% or 10% of a startup. Alsop says. "The reason it makes us look like jerks is because that's a lot of money."
Alsop wouldn't say which company it was. The firm's early stage investments include Ribbit, which is building a platform for phone apps, with a $3 million Series A round in 2006; Cake Financial, which lets people share their stock portfolios; and in the lifecasting Web site Justin.tv.
Echoing these comments from Norwest Venture Partners Tim Chang, Alsop explains that to get the fund performance needed to stay in business, they need to invest in businesses that have the potential to be huge hits.
Alsop is currently looking for investments for Alsop Louie's $75 million early--stage technology fund.
This video is from the San Fran Tech Music Summit, where Alsop and and Chang spoke on a panel that gave online musicians an inside view of the VC industry.
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