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The announcement yesterday that EBay's PayPal was acquiring payment processing platform Braintree for $800 million in cash, combined with the fact that so much attention was being lavished on Braintree's Venmo mobile payment unit (as I discussed yesterday and PayPal President David Marcus also emphasized to TechCrunch) left me pondering why Venmo only sold for $26.2 million when Braintree acquired it just 15 months ago (the deal was done by June 2012 though it didn't become public knowledge until August) if it was such a valuable part of an $800 million deal now. And did the co-founders, Andrew Kortina and Iqram Magdon-Ismail, who started Venmo as undergrads at Penn, get a good deal from Braintree?
Of course, valuations are always a bit tricky when the same party is on both sides. Accel Partners had led Venmo's largest round, and was also a lead investor in Braintree. I'm just mentioning that fact, not inferring in any way that Accel did not take proper steps too see that the interests of both companies were fully represented in the transaction.
But I do hope Kortina and Magdon-Ismail had some kind of earnout provision or equity kicker from Braintree that will give them the type of return they deserve for their efforts.