Exits – NASDAQ IPO means healthy exit

The flotation of Sequoia Software Corporation on NASDAQ has left its venture capital investors – Atham Capital with 8 per cent, Baker Communications Fund with 27 per cent, divine interVentures with 9 per cent and FLV Management’s FLV Fund with 8.6 per cent – looking at a healthy profit.

To give an example of the scale of the return, FLV Fund has an unrealised gain of 313 per cent on its investment in the company. At the flotation price of $8 per share, FLV Fund’s equity stake is worth around $15.5 million (EURO17 million) representing an unrealised capital gain of $11.7 million. FLV Fund also holds warrants on 47,363 shares at an average exercise price of $2.74 per share.

FLV Fund first invested in Sequoia in September 1998 with a commitment of just $3 million. In May 1999 it invested a further $0.5 million, then $0.25 in March 2000 by exercising warrants in Sequoia. FLV Fund’s total equity stake in Sequoia rested at around 8.6 per cent at the time of the IPO; since the float, it stands at around 7 per cent or 1,936,418 shares.

Sequoia is involved in the business of development and distribution of extensible mark-up language (XML) server software for creating interactive e-business portal sites. Sequoia is a US-based company that was founded in 1992. The company filed a registration with the SEC in February this year.