FORTUNE -- Yesterday there were several news reports about how Union Square Ventures had generated a "5,000% return" on its early investment in Tumblr, based on data from research firm Privco. They also claimed that Spark Capital's Bijan Sabet made $77 million for himself, in addition to whatever carry he's entitled to as a partner in the Spark Capital fund that invested alongside USV.
In short, the Privco report is a load of Yahoo.
Here are the actual numbers, based on sources familiar with the situation: USV and Spark Capital each invested a total of $13 million, including $350,000 each in the company's original funding round. Then they each plugged in $2 million during each of Tumblr's next two rounds, before going the pro rata route on the Series D (led by Sequoia Capital) and Series E (Greylock/Insight) rounds.
Following Tumblr's $1.1 billion acquisition by Yahoo (YHOO), USV and Spark each received around $192 million in proceeds (i.e., a combined 35% stake).
Obviously a massive return for each of them, but not the stratospheric figures that Privco quoted. Moreover, the returns all are at fund-level rather than for individual partners. In other words, Spark's Sabet likely makes millions off of this deal based on his share of Spark's "carried interest" – but nothing close to $77 million.
Spark and USV declined to comment on specific figures, although USV's Fred Wilson did comment on Hacker News that the Privco figures were "total garbage." And, to be clear, returns aren't usually something that a venture capitalist wants to talk down...
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Why we're paying attention to the wrong deal.
FORTUNE -- By now I'm sure you've heard about today's big merger news: Actavis (ACT) buying Warner Chilcott (WCRX).
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Yahoo is formally buying Tumblr, but it's really buying Tumblr's leader.
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There is a good case for Yahoo to buy Tumblr. But there's a better case for it not to.
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FORTUNE -- It looks like Yahoo has offered to buy Tumblr for the sticker-shock price of $1.1 billion.
Maybe we shouldn't be surprised, since just a few days ago Yahoo CFO Ken Goldman spoke about the need for the company to be "cool" again. But Yahoo (YHOO) shareholders invest for returns, not for cool. Yahoo employees MOREMay 19, 2013 3:24 PM ET
Tumblr, the lightweight blogging company, has raised between $25 million and $30 million in new VC funding, Fortune has learned. The valuation is in the ballpark of $135 million.
BusinessInsider first reported on the existence of a new round last week (sans financial details), and said that Sequoia Capital was the lead investor (Update: Seems Om beat them to the first part). I'm told it was a highly competitive auction, with MOREDan Primack - Nov 19, 2010 9:58 AM ET
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