My Questions on General Catalyst Partners

The New Jersey State Investment Council (SIC) held their monthly meeting yesterday (as covered by NJTV) and the focus was on one particular venture capital investment and whether it was made for political reasons:
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But in looking through available information on General Catalyst Partners other questions pop up:

Based on their website General Catalyst Partners (GCP) gives money to a bunch of entrepreneurs who then presumably repay them at usurious rates.

One of the entrepreneurs that GCP (and by extension New Jersey) invested in was Jessica Alba and ‘The Honest Company’ which was started in 2011 but is supposed to be worth nearly $1 billion now with 300 employees and “reportedly raked in $50 million in revenue in 2013” according to a Yahoo story that admits “right now Honest is getting about 80% of its revenues from its online store where its easier to control the customer experience.”  Is something, based on an idea that must surely have been tried before, that was worth $0 in 2011 really worth $1 billion now?

Then there is the question of what New Jersey really invested in GCP.  According to a Fortune article:

In April 2011, Baker joined Cambridge, Mass.-based venture capital firm General Catalyst as an “executive-in-residence” (XIR). One month later, he made a $10,000 donation to The New Jersey Republican State Committee, apparently in reciprocal gratitude for help that New Jersey Gov. Chris Christie gave Baker during a failed 2010 gubernatorial run. Four months later, General Catalyst began soliciting capital for a new fund from New Jersey’s state pension system. The pension’s investment staff recommended a $20 million commitment that December, with General Catalyst ultimately agreeing to accept $15 million (the fund was oversubscribed, so not all investors could get their desired allocations).

So reading that you would think it was $15 million that New Jersey gave GCP but when the announcement of the sale was confirmed yesterday an nj.com story had this:

Washington University was the buyer, according to the Division of Investment. Joseph Perone, a spokesman for the Department of Treasury, said the state was initially authorized to invest $15 million but had invested $9.6 million. The final sale was for $14.1 million.

But when we go to SIC audits of the investments we see as of June 30, 2012 and June 30, 2013 the value of a Private Equity investment in ‘GENERAL CATALYST GROUP VI LP” as $366,322 and $3,988,185, respectively.

  • What’s the right number?
  • Does anyone know?
  • Does it matter who’s asking the question?

Just a few of the questions I have that the SIC members don’t seem to.

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PS: Thank you to pension360, a fairly new website covering these issues, for picking me up.

7 responses to this post.

  1. Posted by Anonymous on September 18, 2014 at 3:48 pm

    Misdirected account entry,probably the cost for administrative and investment fees a liability not an asset. Mr Grady’ s mystery investor account saw a revenue increase, thanks to police, firefighters, teachers and public employees.

    Reply

  2. Posted by Anonymous on September 18, 2014 at 5:08 pm

    TL has no interest in whether politicians are acting dishonestly. She accepts this.

    Reply

  3. […] Quadruple your money by investing in Jessica Alba […]

    Reply

  4. […] it happens Jessica Alba came up last […]

    Reply

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