Some back-of-the-envelope math shows why: Take Uber's $1.5 million angel round, led by First Round Capital and Lowercase Capital. It had a valuation of around $4 million pre-money. The company's later rounds had valuations of approximately $40 million for its Series A in 2011 and $300 million Series B later that year. Six months ago, Uber raised money from Google Ventures and TPG at a $3.5 billion post-money valuation. The company's revenues were around $125 million last year, which handily beat expectations.
The company's success is having a halo effect for its early investors, who seem to be having no trouble raising new funds. In investment meetings, limited partners are preaching the gospel of Uber. "Anyone with Uber in their portfolio is looking pretty good right now," one LP said.
In addition to First Round and Lowercase, that Angel round included backing from angel investors Mitch Kapor, Alfred Lin, Naval Ravikant, Babak Nivi, Cyan and Scott Banister, Shawn Fanning, Jason Calcanis, Mike Walsh, Oren Michels, and Josh Spear.
Shervin Pishevar was an early investor in Uber and later led Menlo Ventures' $37 million round in the company. He's used momentum on that and other investments like Tumblr and Warby Parker to raise money for his own fund, Sherpa Ventures. On Tuesday Dan Primack reported that Pishevar has held a first close on $87 million in commitments, beating its initial target of $60 million. The overall fund has a target of $150 million. One of Sherpa Ventures' limited partners is TPG, which also invested in Uber.
Techstars CEO David Cohen, who invested in Uber's first $1.25 million round, is in the market raising $150 million for his next fund (called Bullet Time Ventures 2014), according to an SEC filing from December. The new fund, his third, is a significant step up from his prior fund, a $25.6 million vehicle raised in 2012, and sources say he is nearing a close on the full amount. (Cohen declined to comment beyond the filing.)
Meanwhile, Founder Collective, which backed Uber's Series A, is currently investing from its second fund, a $70 million vehicle which closed last year. It is almost double the size of its first fund. And First Round Capital is slated to raise a new fund in the second half of this year.
If the company continues its current trajectory, the Uber Effect may become the new Facebook Effect. Recall that Facebook's early investors, including Jim Breyer, Marc Andreessen, Peter Thiel, Reid Hoffman, and David Sze, have been among the most successful investors for the past several years.
Surprisingly, given how close-knit the Silicon Valley investor community is, there's only one investor Uber and Facebook (FB) have in common: Goldman Sachs (GS). Update: Uber and Facebook actually have two investors in common. In addition to Goldman Sachs, angel investor Matt Ocko made early bets in each company.
With a successful hedge fund and a top-secret security firm under his belt, Joe Lonsdale is trying something new.
FORTUNE -- Joe Lonsdale is what an earlier generation would have called a young man in a hurry. A protégé of investor Peter Thiel, Lonsdale helped him build Clarium Capital into a multibillion-dollar hedge fund. Then, again with Thiel, Lonsdale co-founded Palantir Technologies, a security analytics software firm.
Having made a small fortune MOREAdam Lashinsky, Sr. Editor at Large - Sep 11, 2012 5:00 AM ET
Facebook's earnings disappoint; Amazon's profit drops.
Instagram hits 80 million users, with 4 billion photos shares [THE NEXT WEB]
Regardless of the opinion of pundits, though, Instagram continues to grow at a massive rate. And it shows no signs of stopping now.
Facebook earnings: Good, but not good enough [CNNMONEY]
Shares of Facebook fell more than 10% to around $24 -- nearly 40% below the company's initial public offering price. Facebook did beat analysts' revenues expectations MOREJP Mangalindan, Writer - Jul 27, 2012 12:11 PM ET
Fortune's curated selection of tech stories from the weekend. Sign up to get the round-up delivered to you each and every day.
* Instagram reported that it now has 27 million registered users."It's Facebook-level engagement that we're seeing," co-founder Kevin Systrom said at South by Southwest over the weekend. Also, the long-awaited Android version is coming very soon. According to Systrom, it will be better in some ways than the current iPhone version. (Mashable)
* Mega investor MOREJP Mangalindan, Writer - Mar 12, 2012 5:30 AM ET
As Goldman Sachs, Accel Partners, and others clamor for a larger piece of Facebook and its valuation spirals upwards, here's a look back through all the VC rounds and players that fueled Facebook to be what it is today.
When Goldman Sachs (GS) and Digital Sky Technologies invested $500 million in Facebook, propelling its valuation to a new high of $50 billion, they renewed chatter about whether the social network was MOREJP Mangalindan, Writer - Jan 11, 2011 10:46 AM ET
At least one company is making money off of social networking. The game developer behind 'FarmVille' and 'Mafia Wars' has seen its web-based games take off - and deliver profits.
On any given day 500,000 tractors are sold on the Internet. But don't start buying stock in John Deere or Caterpillar just yet. These are $20 "virtual" tractors that belong to the 50 million players of FarmVille, the largest and fastest-growing MOREJessica Shambora, Writer-Reporter - Oct 26, 2009 6:00 AM ET
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