The Money is in Venture Capital

The investors of YouTube Inc. received stock now valued at about $650 million when they sold the business to Google. Sequoia Capital, YouTube’s sole venture capital backer, stands to get about $442 million in Google shares, based on Wednesday’s closing price of $470.01.  Sequoia invested $11.5 million between November 2005 and April 2006. It’s investment purchased 30% interest in YouTube.

So, in less than 12 months, Sequoia walked away with 43 times its initial investment.

Dozens of limited partner investors in Sequoia Capital also received their share. They included endowments from universities including Harvard, Yale, Brown, Columbia, and Oxford; and the investment arms of the families connected with the Getty, Palo Alto-based Hewlett-Packard Co. (NYSE:HPQ) and Santa Clara-based Intel Corp. (NASDAQ:INTC) fortunes, among other beneficiaries.

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