Yesterday at TechCrunch Disrupt, Fred Wilson said he didn’t deny the reports that he’s sold Twitter stock. But it was for the long-term benefit of the company, the investor said, and would have been basically imprudent to turn down. “If you buy stock at 5 cents a share and someone is coming along to offer you $50 a share… and even by selling five or 10 percent you might make 10 or 20 times your entire investment” it’s hard to say no, he said. Hard to argue with that.
TechCrunch reported back in February that Union Square Ventures, Spark Capital, Twitter’s co-founder Evan Williams and some other early employees sold stock to a fund run by angel investor Chris Sacca.
But USV would never sell shares without having a company’s founders on board, he said, and would never sell stock on SharesPost or SecondMarket. Private sales are cool though, he said. “There many cases in our portfolio where founders are selling and we’re buying,” he said.
This is an increasingly common way of raising capital without compromising a company’s independence, he seemed to be saying, a mechanism that brings its own problems but is a good alternative to subjecting a company to the quarterly, short-term pressures that come with an IPO.