Multiples Over Absolute Dollars

"As for investment results he was a fan of two things: large amounts of gain and very high multiples. Though he understood the personal benefits, he thought any goon with a spreadsheet could double a large amount of money but believed it took real talent to consistently deliver high multiples of money. The shenanigans of the leveraged buyout business with all its financial hokey-pokey left him cold."

"By today’s standards, the amount of time between an investment and distribution was astonishingly short. Sequoia’s $663,000 investment in Altos in December 1980 resulted in a post-IPO $20.1 million distribution before the end of 1982. (If those returns from the Altos investment today seem small in absolute terms today, just multiply by ten or twenty. We do not have many $6 million or $12 million investments that have turned into $200 million or $400 million. In fact, since 1974 we have only had 42 investments with a multiple of more than 20X on invested capital.)"