Angel investor makes a Mint
At 5-foot-8, Dave McClure calls himself “one of the smallest” venture capitalists in Silicon Valley, either “by height or by wallet size”. But he was walking tall after Intuit announced it was buying Mint.com recently for $170 million.
That means McClure, who invested $25,000 in Mint two years ago as part of a Series A funding round, is in line for a healthy payout. At the time McClure was actually on Mint’s payroll as a consultant, but was so impressed with the startup’s founder, Aaron Patzer, that he took the money they were paying him and “turned it right back around and wrote them a check.”
Mint is the first big win for McClure out of the many companies he’s invested in since cashing out from his part in PayPal’s $1.5 billion sale to eBay. “I’ve been doing angel investing for almost five years now and this is the first full exit I’ve had,” said McClure, who first found out about the deal in a 4 a.m. email from Patzer.
A few hours later McClure was hi-fiving fellow investors Rob Hayes (First Round Capital), Mark Goines and Jeff Clavier (SoftTech VC) at the TechCrunch50 conference in San Francisco, where McClure said they were all walking around “with big-ass smiles on our faces.”
Prior to its exit, Mint had raised a combined $30 million – half of that coming in a Series C round led by Benchmark Capital that just closed in August. Some have questioned whether Mint’s $170 million sale was high enough given the amount of VC capital it raised, but McClure disagreed.
“From the angel and A round point of view it was a great outcome,” insisted McClure. “For the B round investors, I’m not sure how big a win Benchmark was expecting, but just looking at it from an IRR (internal rate of return) basis it’s still a pretty good story for them. For the C round investors, I don’t know anyone that makes that good a return in 30 days or less.”
Blogger Jason Fried, of 37Signals.com, didn’t take umbrage with the sale price, but in a post said it was an example of the “VC-induced cancer that’s infecting our industry and killing off the next generation” and that Mint’s exit was likely forced by investors. Union Square Ventures’ principal partner Fred Wilson countered Fried’s assertion in his own blog titled “Who Decides When To Exit?”
PE Hub editor Dan Primack agreed with Wilson in an interview for Reuters.
McClure said he likely won’t see any money from the sale for another month or so and has no plans to quit his day job as the manager of venture firm Founders Fund’s (with old PayPal boss Peter Thiel, also a Mint investor) FF Angel seed-investing program (under $1 million) and Facebook’s startup incubator program fbFund REV.
McClure said this year’s fbFund winners were more productivity-focused Web-based companies, like Mint, that incorporate social aspects. One of them is Life360.com, a service that helps consumers keep closer tabs on family members, find lost phones or keys and protects them from identity theft.
“They’re less typically Facebook-platform apps (i.e. poker) as opposed to just normal travel or exercise websites and services,” said McClure, who seems to be on the lookout for the next Mint from among the 400 or so applicants fbFund received this year. “There’s a whole set of different things that I think people never thought about managing online before that they’ll probably start to be able to have a set of tools to do that with now.”
No doubt McClure and the rest of Mint’s investors will be keeping close tabs on what Patzer decides to do next, after the Intuit sale is finalized. “I’m sure he’d have no problem raising capital if he decides to do that,” said McClure. “This has been a great win for him and for several of us (investors).”