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Making some people very rich is not the same thing as creating value. If Groupon investors get rich at the expense of retail investors, that's bad. If the Gro
by Lambent_Cactus 15y ago
Making some people very rich is not the same thing as creating value.
If Groupon investors get rich at the expense of retail investors, that's bad. If the Groupon founders get rich at the expense of retail investors and later venture investors, that's also bad. In fact it's worse, because they have more information about the business than the investors do. The closer you are to the center of the business, the more you are implicated if it turns out to be a giant pump-and-dump scheme. The founders are the rotten core of that scheme.
- raganwald 15y agoI disagree that the founders somehow have a higher and nobler responsibility to retail investors than VCs. The VCs are the professionals, they sit on the board and direct its activities. These ideas about the difference between management and bankers made sense when IBM or US Steel went to the public markets to raise money in the old days, but where Tech Startups are concerned I am skeptical that founders are pulling the wool over the VC's eyes. But I suspect we're quibbling over who gets the lion's share of the tar and feathers :-) UPDATE: But yes, I agree about the word "value."
- Lambent_Cactus 15y agoYes, 'rotten core' was a bit strong. :P I don't know anything about Groupon's specific case, and it's certainly true that in many cases the VC's will be the more experienced and better informed, and therefore more culpable party. Comity!