Accel Partners
One reason to flood the Facebook market
August 17, 2012: 12:26 PM ET
Selling shares before the tax rates rise.
FORTUNE -- Accel Partners yesterday distributed approximately 50 million shares of Facebook (FB) stock, following the expiration of a 90-day lockup. We don't yet know how many of those shares made it to market, but we do know that many limited partners in venture capital funds are effectively required to liquidate upon receipt.
My first thought was to criticize Accel for such a massive distribution. Sure 50 million shares represented less than half of the VC firm's holdings, but wouldn't it risk depressing the company's stock price by flooding the market with shares? And, in so doing, reduce returns for some of those limited partners who needed to sell?
But then an emailer reminded me that the capital gains tax rate is scheduled to increase on January 1, from 15% to 20% (plus a bit more, if healthcare-related taxes are included).
This is where it gets tricky. Lots of Accel's investors are nonprofit institutions like university endowments and charitable foundations. They would prefer the higher stock price, since tax rates are irrelevant to them.
But others, like corporations and high-net-worth individuals, are subject to capital gains taxes. And put Accel's partners into that latter category, in terms of both returns from monies invested into funds and for carried interest generated by third-party investments. For all of these folks, capital gains rates matter.
Look, I'm not arguing that Accel distributed such a large number of shares for the purpose of tax arbitrage. First, because I think proper portfolio management makes much more sense as the primary driver. Second, because it could have bled the shares out over the next couple of months, thus protecting both the stock price and the tax incentive.
But it's worth remembering, particularly for the next lockup expiration, that certain investors will benefit from getting shares out in 2012 rather than in 2013. Including the VC firms themselves.
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The Facebook distribution dilemma
Facebook is unlocked. So who held, and who sold?
FORTUNE -- Approximately 271 million shares of Facebook (FB) stock were "unlocked" yesterday, under a provision that had prevented certain investors from selling shares until 90 days after the company went public. And, as happens after most lockup expirations, Facebook took a tumble – down 6.27% to finish trading at $19.87 per share. For context, the IPO price on May 18 had MORE
Dan Primack - Aug 17, 2012 9:53 AM ET -
Qualtrics raises $70 million from Accel and Sequoia
Big data company raises big money.
FORTUNE -- Qualtrics Labs, a 10-year-old provider of enterprise SaaS for simplifying complex research, has raised $70 million in its first-ever round of outside funding.
Accel Partners and Sequoia Capital co-led the deal, with Ryan Sweeney (Accel)and Bryan Schreier (Sequoia) joining the Qualtrics board of directors. It was the two firms' largest-ever joint investment, and also probably their biggest deal for a Utah-based company (Qualtrics is MORE
Dan Primack - May 15, 2012 11:04 AM ET -
What Facebook IPO says about venture capital
Facebook IPO helps prove a VC rule
FORTUNE -- When Facebook goes public next week, it will mean a massive payday for Accel Partners -- the venture capital firm that originally backed Mark Zuckerberg in 2005 and remains the company's largest outside investor. It also could help support an argument that the most successful VC funds are small VC funds.
In a recent report on the sad stage of venture capital, the Ewing Marion MORE
Dan Primack - May 11, 2012 4:16 PM ET -
Daly leaves Accel Partners
Jeremiah Daly has left venture capital firm Accel Partners, Fortune has learned. No word yet on his future plans.
Daly joined Accel's London office in 2009 as a principal, and led the firm's investment in Russian online travel company Ostrokok. He also was a board observer at French online private sales club Showroomprive, Finnish online gaming company Supercell and a stealthy storage infrastructure company. He also has been involved with Atlassian, an MORE
Dan Primack - Feb 13, 2012 11:04 AM ET -
Accel's new face in New York
David Eisenberg joins Accel Partners.
When venture capital firm Accel Partners opened a New York City office last January, it did so without any permanent New York City staff. Instead, the early plan was to use a rotating case of Accel investors from other offices -- including Jim Breyer and Theresia Gouw Ranzetta. A sort of professional flophouse, if you will.
But Accel now has a permanent rep in New York City: David Eisenberg, MORE
Dan Primack - Jan 26, 2012 10:33 AM ET -
Accel's so-called 'fund'
When is a VC fund not a VC fund?
It looks like venture capital firm Accel Partners has successfully taken a page out of the Kleiner Perkins playbook, announcing a so-called "fund" for the purposes of hyping a new investment strategy.
Accel this morning said that it has launched a $100 million "Big Data Fund," but the $100 million isn't actually new money raised to invest in big data startups. Instead, it's basically MORE
Dan Primack - Nov 8, 2011 1:47 PM ET -
Early Facebook investor raises $1.35 billion
When it comes to venture capital, the rich just keep getting richer.
Venture capital firm Accel Partners has raised $1.35 billion for a pair of new funds, after less than two months in market.
The larger of the two is Accel's second growth equity fund, which closed on $875 million. This compares to $480 million raised for the firm's debut growth equity fund in 2008.
In a statement, the firm described its growth MORE
Dan Primack - Jun 16, 2011 4:22 PM ET -
Why 99designs raised $35 million from Accel Partners
99Designs, a crowd-sourced online marketplace for graphic designs, today announced that it has raised $35million in venture capital funding. Accel Partners led the round, and was joined by angel investors like Stewart Butterfield (Flickr, Tiny Speck), Dave Goldberg (SurveyMonkey), Michael Dearing (eBay, Harrison Metat) and Anthony Casalena (Squarespace).
This is the first institutional round for 99Designs, which spun out of Australia's SitePoint in early 2008. The company pays out over $1 million each month MORE
Dan Primack - Apr 28, 2011 4:00 PM ET -
William Morris closes The Mail Room (Fund)
The Mail Room Fund launched three years ago to a flurry of Hollywood fanfare. Now it has disappeared with nary a whimper.
Venture capital goes Hollywood.
That was the message in March 2008, when Silicon Valley stalwarts Accel Partners and Venrock partnered with the William Morris Agency and AT&T (T) to invest in Southern California's early-stage digital media market. They called their brainchild The Mail Room Funds, as an homage to the legendary MORE
Dan Primack - Apr 25, 2011 2:30 PM ET
