Former founder, software investor and banker. Email me directly for some free advice on this one. You’ve got some options and good approaches - I can point you to some friends who work at shops that help companies like yours. Cameron.mullen@gmail.com
I bet there are at least 3 teams each in HP and IBM that use separate GitHub enterprise installations.
For these companies, using public GitHub isn't even a question. It would cost far more in terms of lawyers, managers, etc to approve use of public GitHub than to just buy an enterprise installation for a department.
Also, just because they have (and sell) a product that does this, doesn't mean that they use it, that it's appropriate, that their devs want to use it, etc. Separate departments in companies of these sizes act like individual companies, IBM even has the term Blue Dollars for money that they spend on other IBM services.
Mid-sized mature software businesses have figured out how to run very very profitably (25%+ EBITDA margins). Tech management teams have learned from the giants (Oracle, SAP, etc.) about how to extract maximum value from their IP and past investments. This innovation helps drive earlier stage investment, as investors know that there is a potential for a ton of cash flow available down the road.
GP commit is always at least 2%. Also, I think its pretty disingenuous to say that partners at VC / PE make money whether the fund does well or not. The management fee (2%) almost all goes into operating expenses - mostly salaries for mid-level / junior folks, professional / legal fees, research, consultants, etc. Partners make almost no money off of the management fee (LPs make sure that the management fee is just sufficient to cover the operating expenses of the fund) The way that partners make real money is through carried interest. Most funds have a hurdle rate of return (around 8%) below which, no carry gets paid. Furthermore, the vast majority of LP agreements have clawbacks associated with early carry paid in the event that later investments prove unsuccessful. So, unless the fund returns 8% per year to its investors, the partners make only their salaries.
Public markets investors typically have far less information about companies than do private investors. For most technology companies, the probability of success / profit is driven more by specific company factors rather than larger industry and macro trends. Most public tech companies are understandably worried about disclosing detailed sales metrics / technology roadmap to all investors for competitive reasons; however, as part of any PE / VC backed investment process, private investors are typically given access to all of this detailed information.
Ah yes so private investors have more specific information while public market investors focus on overall market trends. But is there no way to public investors to get a glimpse of the internals of the companies without disclosure of competitive information? Maybe through some kind of report by a consultancy under NDA, or a small group of investors under NDA giving an investment report?
Under the SEC's Reg FD, public companies are required to disclose all material information to all investors at the same time. So, what you propose is not really workable under the current regulatory regime. Sometimes public companies will give extra disclosure to help investors (e.g., product line revenue, numbers of employees within each function, etc.), but often that information is not enough to truly diligence an investment thesis.
As a result, there is a slight information asymmetry penalty in the valuation; however, this penalty is dwarfed by the liquidity premium you get as a public company.
This isn't really applicable for high-growth venture backed companies because generally, they aren't leverageable. It's almost impossible to lever a minority equity investment in a private company. It's true equity capital going into late stage VC / growth equity.
However, for mature tech businesses that have real cash flow, LBO valuations are driven by a levered cash flow yield. Valuations in this world are increased with higher debt availability and low interest rates.
The primary mechanism by which low interest rates influence late stage VC / growth equity valuations is in the amount of capital the LP community / institutional investor base allocates to those asset classes. Right now, that allocation is quite large driven by the need to move into riskier asset classes to drive investment yield.
