News Corp. – Intermix: VC Payday

Bill Burnham picks up on VCs victorious in a detailed look at the financing of MySpace and Intermix or, as he puts it, “A VC Social Networking Payday … Finally.” Burnham writes: “For VCs, this sale is significant because it represents the first real payday in the social networking space, a space that to date has seen lots of VC hype but very little returns.” He taps into the Intermix SEC filings for data. Redpoint invested $4 million in Intermix in December 2004 and $11.5 million in MySpace two months later for a 25 percent stake. Intermix negotiated in the right to buu the MySpace shares it didn’t own for a fixed price — $125 million — if the company sold within 12 months. As a result, Burnham explains, Redpoint’s share of MySpace is worth $31.25 million, a 2.7X return. The investment in Intermix should bring about $13.2 million, a 3.3X return.
VantagePoint stands to make $139 million at the rate of $12 a share, some of it because someone at Sony didn’t do their homework when constructing a deal to sell VantagePoint options on shares once held by a Sony VC fund 550 Digital Media Ventures. The return on VantagePoint’s total investment: 9.1X. Many more details for VC aficianados in Burnham’s piece.