Random Groupings of Words

I’ve heard so much buzz lately about Groupon declining Google’s acquisition offer fo $6 billion. The tech news sources are all abuzz with speculation and reaction os to why Groupon would make such a bold move and decline such an offer. Take a look at this article from Mashable:

http://mashable.com/2010/12/03/groupon-google-no/

The part of the article specifically that I’m referring to is:

“According to Chicago Breaking Business and Bloomberg, Groupon has decided that it is better off on its own. To say this news comes as a bit of a shock would be an understatement. Many in the technology world believed that Groupon would accept Google’s offer, making its three co-founders (CEO Andrew Mason, Eric Lefkofsky and Brad Keywell) billionaires”
Now I’ve only lived in the Silicon Valley for a year, and I’m still kinda new to investment concepts, but isn’t this Investment 101 shit? From what every magazine article, meetup group, conference panel, investor meeting, etc, tells me: angel investors are looking for a 10x return on their investment and VC is looking for somewhere between 20x and 50x.

I have also learned that investors are always looking for that once in a lifetime deal that will take their mountain of cash and make it into such an insurmountable mountain that I have to stop imagining what they could possibly do with that cash.

Now those same news sources also reported a few months ago they type of investment Groupon received: $135M raising their post-money valuation to $1B.

http://mashable.com/2010/04/18/groupon-valuation/

So, let me get this right, tech news sources. If Groupon sold to Google for $6B, that would be a return on investment of 6x, not even the types of numbers that would excite an angel investor! So WTF would it matter if the founders would be billionaires? Since when do investors care about the founders over themselves? It seems like to make good to investors, the company would have to sell for at least $10B, and if Google wanted to make a real offer, they would have had to go at least that high.

Now I understand that $6B is crazy crazy money to most of us common folk, who don’t even have a proper understanding of those numbers. And then you have a big name like Google making the offer, and whose goal isn’t to get bought out by Google these days?

But is that enough to make this news so incredulous? I say screw you, news sources. Tell it like it is. If a green simpleton like me can put that together, surely you can.