Doubling your investment in six months is pretty good, but VCs would much rather wait three or four years and get 20 times their investment. Since it's a minority of companies that turn a profit for their investors, a Parakey-scale success is not the kind of thing that VCs dream about. $4 million is probably less than Sequoia invests in most of its companies, so it's certainly less than they're hoping to get out. If they turned a $2 million profit, that's a piddling 1% return for a $200 million fund.

This is a really interesting case of founders turning the tables on VCs. When there's a lop-sided outcome, it's usually, from what I gather, the VCs who come out on top. I wonder how much of the uniqueness of this had to do with Blake and Joe's high profile (and their presumably resultant ability to get unusually favorable terms from investors).

Parakey had an incredible number of people involved in their angel round. I'm sure almost no one had a substantial (money-wise) investment in these guys. The early exit was probably somewhat disappointing relative to what could've been a huge late exit, but you can't be too sad doubling up that fast.

In other news, Facebook has $4million in cash to hire two people with??

Edit: I needed to reread the article.

Reread the article.

OK, I get it. All the cash compensation went to the investors.

PG: as an investor, how do you feel about this?