(re: Venture capital investments in Sierra On-line) But we would actually like to know the amounts that each vc put in, the timing and rounds of investments, the importance of vc funds relative to internally-generated funds as well as individual investors, the distribution of ownership, etc. I wonder whether you would be able to share some of this information with us.
Bill:
I started to read your paper, but quickly realized I need more time for it… I’ll return to it after I finish chasing some bugs…
With respect to venture capital:
It has been over 25 years since Sierra’s first venture capital round. I really don’t remember what venture capital we raised, or who from.
Our first round was only $1.2 million, and was mostly TA Associates, with a small amount by Alex Brown and someone else who I don’t remember.
We raised a second round, of around $5 million a year later (approx. 1981) from TA Associates, Early Stages, Alex Brown, General Atlantic, and ??? I think TA lead the round, and put in $2 or so of the round.
I don’t believe there was a third round, although, in 1983 we almost bankrupted, and there was a small round (approx. $2 million) which came in as debt, with an equity kicker. We turned the company around almost immediately, and wound up not needing the money. It was repaid within a few months of having been borrowed. The bad part was that we gave HUGE options to purchase additional shares as an incentive on the debt, and Roberta and I became enormously diluted as a result.
We raised $20 million in our IPO, which I think was in 1988. We then followed this with a secondary stock offering ($30 million) in 1991, and a convertible debt deal ($50 million) in 1993.
In approximately 1994, we did a small venture capital round (unusual for a public company) of approx. $5 million, with General Atlantic. This money was to form a joint venture between General Atlantic, AT&T and Sierra for The Sierra Network (TSN) – an online games network.
My recollection is that we had $50 million plus in cash at the time we were acquired.
I wish I could give you more detail – but, it has been a LONG time…
-Ken W