Fwiw, I can't imagine how the founders & team are feeling right now. It's unbelievable that a new CEO comes in after 6 mo & nets $11m. I am angry for them. 
Show this thread
FanDuel raised $416M at a $1.3B valuation & got acquired for $465M. The founders will get nothing after nearly 10 years--can't really beat pref stack. Maybe they took something off the table but still a farcry from the goal. Let this be a reminder: raise what your company needs.
-
-
-
“We never envisaged it would be used to screw everyone who wasn’t an institutional shareholder,” said one early FanDuel investor, who did not wish to be identified. More:https://www.thetimes.co.uk/article/how-fanduel-founders-and-staff-lost-out-to-wall-street-q2j0v3npl …
Show this thread -
More info about FanDuel founders/employees getting screwed: Sounds like the the new investor shadily executed a nuclear option rarely deployed if investors see the business not succeeding (in their opinion) & want to return as much capital as they can for LPs. Founder nightmare!
Show this thread -
"Drag-along rights are not uncommon and are used to allow majority shareholders to sell a company when a minority objects. However, they are rarely invoked in deals that result in early-stage investors being totally excluded from the spoils."
Show this thread -
“Investors who participated in a $275m fundraising led by private equity giant Kohlberg Kravis Roberts (KKR) in 2015, meanwhile, have been awarded 2.35 new shares for every existing share.” Read:http://www.heraldscotland.com/business_hq/15455613.FanDuel_hands_more_equity_to_backers_in_merger-termination_deal/ …
Show this thread
End of conversation
New conversation -
-
-
I
agree with your statement but you’ve no idea what went on internally. Don’t judge unless you know the details. Also FYI our main competitor raised almost one billion dollars. What would you have done? -
True. Doesn't matter what I'd do, you have the context. Wasn't attacking you guys.
-
No worries
- 1 more reply
New conversation -
-
-
Ha. I literally just tweeted this.https://twitter.com/rjonesy/status/1015637769585152000?s=21 …
Sell your company for $210M after Series D....equals the same net to a Founder as selling for $38M after Seed Round. That’s a lot of work between Seed and D, for nothing except more return to your VC.
https://medium.com/strong-words/meaningful-exits-for-founders-4c3b2baba6b4 … -
That's a great post
-
Ditto. Super clean and clear.
- 1 more reply
New conversation -
-
-
I wrote this a while ago from the point of view of a founder’s personal financial return. If its not a rocket ship then the optimal personal financial strategy for founders is to bootstrap, raise only seed funding, grow fast, and exit.https://medium.com/startup-grind/optimum-financial-strategy-for-founders-raise-seed-funding-grow-fast-and-exit-922559317f94?source=linkShare-5b45229e9fb9-1530989720 …
-
This is you painting it as it is, the funny thing is lots of people knows this but they prefer the social hype and validation
- 1 more reply
New conversation -
-
-
Totally agree, I hate that founders get put on a pedestal based on how much they have raised, which is not a good proxy indicator of success!
Thanks. Twitter will use this to make your timeline better. UndoUndo
-
-
-
Funding rounds pays for Expenses and Capital, aka burn rate. Selling price of a company is based on projected Revenue, Profits, Debt, and Goodwill. I'm not sure there is there is a direct relationship. People just hope funding increases ROI.
-
Profits is a function of expenses. It becomes harder to justify higher multiples if profits are slim as it’ll take longer to recoup the investment.
-
Agreed. But for startups, profitability seems to be an option, not a requirement for acquisition or IPO these last couple of decades.
-
That’s very true. Great point. I’d love to take a look at the deal structure
-
Exactly. And, the smaller the Goodwill, the better because that's a fudge factor.
End of conversation
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.