Already sitting on two of the best VC exits of 2007, Sequoia and NEA did it again last week when Sourcefire completed an IPO on Nasdaq. The two firms led Sourcefire's $11 million second round of funding in February 2003 and bought in at $1.54 per share, 50% less than the valuation paid by first round backers - Inflection Point Ventures, Sierra Ventures, Core Capital Partners and Big Basin Partners Timark LP -- one year earlier.
Still, as long as Sourcefire's shares remain at their current levels by the time the venture capitalists can sell all their shares, everyone wins from this liquidity event.
Even after selling 255,831 shares in the IPO, Sierra Ventures remains Sourcefire's largest shareholder with about $70 million worth of shares. Neither NEA nor Sequoia sold at the offering and retain 13% and 5.8%, respectively.
After Sourcefire's proposed sale to Check Point Software was nixed by regulators on national security grounds last year, the company went on to a $20 million Series D round led by Meritech Capital Partners. Meritech's investment is up more than 100% at Sourcefire's current share price of $17.08 per share.
While it occurred one year later, Sourcefire's current valuation of $410 million is almost double the $225 million price that was being offered by Check Point. Just goes to show that good, smartly managed startups find profitable exits no matter what the circumstances.
Tags: sourcefire, checkpoint, sequoia+capital, nea, vc, venture capital
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