Now That's A Venture Return

How does 740 times your money in 20 years sound?

Sounds fantastic to me.

That's what Steve Jobs just did.

20 years ago, he bought Pixar for $10mm.

And he just sold it to Disney for $7.4bn.

Now he's surely taken some dilution along the way and he may have ponied up more money along the way too.  That's what happens with venture investments.

So maybe he made 300 to 400 times his money.  Who cares?

Say what you will about Steve Jobs, and I have said plenty about the consumer unfriendly stuff that Apple is doing with the iPod and online music lately, but he is one of the great technology businessmen of our time, maybe the greatest.

And this deal should go down in history as one of the great venture investments.

Comments

[Andrew Batchelor]

Can we be sure Steve Jobs is entitled to all the credit? Check out this Ipod prototype!
http://www.privateequitychina.com/2006/01/ipod_prototype.html

[Anona]

You gotta be kiddin'.

Jobs is no VC. He invested in Pixar when it wasn't the most popular idea, he ran the company and waited 20 years for his return. VCs don't do that.

Don't flatter yourself by dubious association.

[Lars]

Getting your money back 300-fold over 20 years translates into an average 33% annual return. Not to be scoffed at.

[steve]

Jobs is a visionary and a tough SOB and we all bow down, as we should.

But no way would any VC have made money on Pixar -- the company basically was a huge money pit without a mission for five, count 'em five, years even after Jobs bought the clunker in 1986 from George Lucas (who had finally got sick of all the losses.)

And five years later, all that happened was Pixar got a distribution deal with Disney.

That is, Pixar still had one little task left: make a hit movie.

The magic is, almost singlehandedly executed by John Lassiter, the true Pixar genius, Pixar then created a hit movie. Then another. Then another. Then another.

So lets see -- VC material? A decade or more of massive losses and no traction or business plan. Followed, when a business plan finally emerged, by the most hit driven of hit driven business models, with zero competitive advantage created by technology (anybody could have and can assemble the same exact technology as Pixar -- its the creative staff and projects that drive success.) Somehow I doubt too many VC firms would be comfortable?

God bless you, Steve Jobs. The ultimate entrepreneur!

[Jason Wood]

Jobs owns 30,000,001 million shares personally, so he's looking at a 370x return on his initial investment. I've no idea how much he's put into the firm over time to maintain his 50.1% ownership stake, but it would be very difficult for anyone with an objective perspective to suggest Jobs didn't come out of this smelling like roses.