So they raised $416M and sold for $465M. That's 12% ROI. The investors could just buy normal stocks and get similar returns in a year. I don't think there is anything remarkable about this case. It's not like they got a $100K grant and received nothing from a $500M sale.

ROI depends on whether the company is profitable going forward too I'd imagine...

Why would that matter? The investors got their cash and walked.

This was almost loss transaction. That 12% ROI easily got eaten up in fees.

Several years after their last funding rounds, so the amortized yearly returns would be well below market. Most of the general partners at the VC funds involved likely "lost" money (it'd have dragged down their carry), while the limited partners would have seen below-market returns...

The general lesson is: be smart. Also, taking funding with really bad terms might make sense sometimes. However quite rarely.

The other viewpoint is, that typically at funded startups founders get some salary. You can view it also as an another job.

> FanDuel raised $400M in four years

This changes the complection of the whole article! "Sell for half a billion and get nothing" is _exactly_ what you expect if you raised almost half a billion in finding.

I'm sure all the points in there are important and maybe the author's product is still useful. But it's not really an accurate picture to say that these founders got shafted by unfair terms. They just didn't build a very valuable business relative to the amount of money they spent...

So the founders probably paid themselves great salaries and perhaps even sold some stock during the funding rounds. Their employees on the other hand likely got thrown under, and given that the funding terms were likely confidential had no way of seeing this coming in any great detail.

> Founders and employees would be paid only if the acquisition exceeded $559M

I think the problem with the article is that it emphasized the absolute acquisition value and omitted the fact that the company raised $400M. Considering the amount they raised, $559M seems much more reasonable and not quite bad terms?

That's actually one of the best points in here. They didn't make any money or valuation over their funding. Really? You couldn't make a gambling site for less than $400M? Maybe 2500 years of human labor at 150k / yr? Really?

Their sale was a 16% increase on their investment rounds. They soaked up half a billion in investment, and then got almost no return or "value added."

Almost as dumb as that $500 million tomato farm that couldn't grow tomatoes. (had to check, AppHarvest)