Home Uncategorized How Dollar Shave Club exit teaches entrepreneurs what matters in generating multiples of returns

How Dollar Shave Club exit teaches entrepreneurs what matters in generating multiples of returns

How Dollar Shave Club exit teaches entrepreneurs what matters in generating multiples of returns

In a world with many “paper” unicorns but few actual unicorn exits, Unilever’s acquisition of Dollar Shave Club for $1b of cash is a huge win for venture investors.

In just five years, DSC captured 15% of the men’s razor cartridge market and achieved one of the largest private e-commerce exits in recent years. So who were the biggest winners and how do venture investors think about returns?

Dollar Shave Club raised $163.5m in total venture funding, most recently last November at a $539m valuation. According to PitchBook, seed-round participants garnered the greatest returns, earning an eye-popping 49.7x multiple on invested capital (MOIC). In other words, a $250k seed check would have returned $12.4m. As an entrepreneur it is important to remember that early stage investors are aiming for these outsized returns with each check that they write.

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Later stage investors (Series C through D), including Technology Crossover and Comcast Ventures, invested with greater visibility into Dollar Shave Club’s business and proven market traction. Still, Series D investors returned a 1.6x MOIC, and a 100% annualized return in just 8 months!

Overall, this was a remarkable outcome for both the company and its venture investors.

Dollar Shave Club to continue trajectory under new parent – A pioneer in online D2C subscription businesses, DSC expects to generate approximately $200m in revenue in 2016. CEO Michael Dubin plans to stay on

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