Why? If VCs invested $416M across 2009 (starting with the Series A) through 2017 and the company sold for $465M in mid-2018, how much value increase over the funding amounts did the company generate via its employees?
The Series E itself was 2/3 of the total funding and was about 3 years before acquisition. If we assume all of the investments happened 3 years before (rather than ranging from 3 years to almost 11 years, that's a return of under 4% per year. Investors in Fan Duel would have been just about as well off to pay down their mortgage at nearly historic low mortgage rates rather than invest in risky startups.
If I invest $400M in your company and you sell it for $400M, I think we can all agree that you should get your paycheck for the time you worked at the company, but you didn't create any value from the company.
That failure to create value on the part of FanDuel isn't anyone's "fault" per-se, but it's also not something that means that an equity payday has been earned by anyone.
As far as I remember, there was debate around that valuation.
"Early investors filed suit in New York against FanDuel's board for breach of fiduciary duty in allegedly undervaluing FanDuel to enrich themselves."
( FanDuel Wikipedia )
There was some unusual relationships in the deal, and the valuation of the company post-purchase was dramatically larger.
Not sure if suit is public, but article:
"The new lawsuit claims that the board – which allegedly included only one independent director and six directors tied to KKR and Shamrock – priced the value of FanDuel’s stake in the merged company at about $559 million. That number, the suit alleges, was no coincidence. Under FanDuel’s operative bylaws, preferred shareholders were due to receive all of the first $559 million from any merger."[1]
The Series E itself was 2/3 of the total funding and was about 3 years before acquisition. If we assume all of the investments happened 3 years before (rather than ranging from 3 years to almost 11 years, that's a return of under 4% per year. Investors in Fan Duel would have been just about as well off to pay down their mortgage at nearly historic low mortgage rates rather than invest in risky startups.
If I invest $400M in your company and you sell it for $400M, I think we can all agree that you should get your paycheck for the time you worked at the company, but you didn't create any value from the company.
That failure to create value on the part of FanDuel isn't anyone's "fault" per-se, but it's also not something that means that an equity payday has been earned by anyone.