40x refers to the return to the investors. If investors own e.g. 30% (I am making this number up and have no knowledge of the situation), their return is ~12x.

It's probably more like a 10x to 15x return, unless investors owned 100% of the company :)

either the founders accepted a really shitty investment offer or you don't know how to calculate returns

A big pay day for Venrock. They were the only institutional investor on the deal. Roughly 15x return on their $2.7mm in.

The good news is that since the employees owned some we can be sure that they saw some of that 119M$. That being said their site died :-)

[1] Random note: It seems to me that that KK would be the appropriate unit for millions (thousand-thousands) and MM would be Million Millions or (10^12, or trillions.

Mille, i.e. Latin for a thousand. Thus MM = 1000 x 1000 = 1,000,000.

I rarely see MM used to denote a million outside the financial world. I have never seen a job, for example listing remuneration as "circa 120M" meaning 120,000

It's widely used in advertising/marketing. CPM is Cost Per Thousand.

> I rarely see MM used to denote a million outside the financial world.

Yes, MM is used with some frequency in advertising and marketing to denote million.

Thanks, I've always wondered why people used MM, it made no sense to me.

Wouldn't MM mean 2000 in Roman numerals? Like in MMXII. http://xkcd.com/927/

If you do the math, very few employees will retire.

FU money @ $7 million requires about 6% ownership.

And that's assuming their wasn't a high multiple liquidation preference for any of the investors.

[Investors here: http://www.slideshare.net/about/investors]

That's not to say a couple of hundred thousand dollars for being an employee isn't bad. But the chef isn't going to become a millionaire.

I don't know about you, but if I made $500,000 on a company sale then got another job, that $500,000 would go a long way in helping me save for retirement or cut down bills.

There is absolutely nothing wrong with shooting for a massive exit, but I don't think it is reasonable to hate on a multimillion dollar exit.

Keep in mind the upside of LNKD stock. Still probably not enough to retire for most but the upside is substantial.

The upside potential of LNKD? Depends who you ask.

http://caps.fool.com/Ticker/LNKD.aspx

856 'Underperform' to 196 'Outperform'? Sounds like somebody is bearish! (disclaimer: as i'm sure is quite obvious the Motley Fool community KNOWS EVERYTHING and is NEVER WRONG. coughcough)

this would have cleared any liquidity hurdles, easily. it is a kick-ass outcome for the founders. the investors probably got 10x over 4 years.

What's your source of 3MM revenue for 2008-2012?

3M is not the revenue, how much they raised in total. His point is that they lasted 4 years with just raising 3M (+ whatever revenue they generated)