Such will no doubt be the case for the three venture firms that are at least 5% shareholders in 3PAR Inc.
The Mountain View, Calif.-based storage vendor is at the center of a bidding war between Hewlett-Packard and Dell. The latest offer of $30 a share came from HP on Friday afternoon.
It is unclear if Dell is willing to pound its chest louder than HP and up its offer, since it appears that the 3PAR board is leaning to HP, but I would be surprised if that’s the last we hear from Dell, which made the initial offer to buy 3PAR on Aug. 16.
As Luisa Beltran mentioned on Friday, no matter who wins the right to buy the company, three venture firms are in line for big paydays. Mayfield Fund, Menlo Ventures and Worldview Technology Partners continue to hold substantial stakes in the company nearly three years after its November 2007 IPO. Because of their patience, they stand to make hundreds of millions of dollars more than if they sold their stock just a month ago.
Menlo owns 15% of the company, or 9.4 million shares; Worldview owns 13.4%, or 8.4 million shares, and Mayfield owns 9.9%, or 6.2 million shares, according to a Securities and Exchange Commission filing in August. Collectively, they stand to make $720 million if the $30-per-share offer is accepted. The three VC firms and a dozen others pumped $183 million in funding into the company before its IPO.
Mark Boslet, a contributing writer to peHUB print affiliate PE Week, writes in today’s PE Week about how the VC firms stand to benefit from the 3PAR deal. VC firms typically begin to sell shares after the 180-day lock-up period following an IPO, but Boslet reports that we’re seeing more and more of this—VCs holding onto shares—because the IPO market has been so lousy.
PE Week subscribers can read the story here.
Since we’re always on the lookout for interesting trends, let us know if we’re missing other examples of when VC firms held onto shares of a newly public company only to benefit from the company’s purchase down the road.
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