Fascinating- $22M raised. $6M in revenue. Acquired for $7Mhttps://www.google.com/amp/s/seekingalpha.com/amp/news/3369631-izea-signs-definitive-agreement-acquire-tapinfluence …
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either super compelling retention packages for employees/founders or bet on post merger stock bump to increase ultimate valuation before shares are distributed.
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There is not a single possible package from Izea that could be “compelling.” (Look at stock performance and market cap). Both these companies struggling and far from the top in this crowded ecosystem. Guessing revenue doesn’t tell whole story and this was fire sale
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Ya bottom line has to be atrocious. Scaling neg unit economics most likely.
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Both companies are things of the past. Distant past.
End of conversation
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This is more common than you think. Many co's who go the venture route in funding think they are "tech co's" but there's no path (or at least no one is convinced of that path) to get to 80%+ GM / 30% overall margins.
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Founders/investors realize this and then go on a fire sale to cut their losses and sell for the real value of their business model. Founders *could* have just built the business as an agency over time with zero outside money and probably been millionaires under the same setup.
End of conversation
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We should call that 'vanity SaaS': Where CAC >> LTV but you raise and get revenue growth anyway, so you can raise the next round and then spend that to get the next. Product-market-fit not advised.
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