Last week we reported on an SEC filing of a new $30 million raise for SV Angel, for a fund called SV Angel-III Growth P.
We’ve since heard from multiple sources that this $30 million is a Special Purpose Vehicle for SV Angel, specifically reserved to buy secondary shares in Pinterest for existing LPs. We’ve also confirmed with SV Angel co-founder David Lee that this is indeed the case.
The $30 million secondary investment, which closed last year, was at the same $1.5 billion valuation that Rakuten got in Pinterest’s last, primary, raise, according to our sources. Most of the $30 million will go towards liquidity of early outside investors, and amounts to roughly 2% of the startup at current valuation.
This SPV is similar to the fund Ron Conway reportedly raised from Andreessen and others to scoop up Twitter shares from early shareholders in January 2011. SV Angel, which was co-founded by angel investors Conway and Lee, has already invested in Pinterest in addition to Zynga, Twitter, Square, Fab, Path, Airbnb and countless others.
This SPV fund is independent of its most recent $40 million raise, for SV Angel IV, back in August.
When a startup participates in a secondary sale like this, it decouples shareholder liquidity from exit. In general this is good for company and investor morale, especially in preparation for a possible IPO (you don’t want a whole bunch of people dumping your stock on the day you go public). Money goes back to the individual shareholders and the company gains a strategic investor who might perhaps be interested in later stage investments.
From what we’re hearing, Pinterest helped coordinate this sale for outside investors. Twitter, Groupon and Zynga have held their own secondary offerings for similar effect and SV Angel is also rumored to have done this for Foursquare in addition to Twitter and Pinterest, which Eric Eldon reported on back in March.