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It seems to me that investors keep pouring money into the business in order to try to keep the option to sell it at (capital contribution) break-even alive. The
by antr 13y ago
It seems to me that investors keep pouring money into the business in order to try to keep the option to sell it at (capital contribution) break-even alive. The previous round was a +$40m debt facility, and debt, when you haven't got cash flow, ain't cheap (PIK, warrants @ down round valuation, dilution, etc.). I hope the best for the company, but sometimes I wished SecondMarket, SharesPost, et al allowed one to short startups.
- malandrew 13y agoTotally true about debt, however, in this market, with quantitative easing, current interest rates, etc. and with the right connections to people in finance, you can leverage a company for a lot less now than any time I can remember. Getting a loan is the hard part. If you can get one, you're getting it for pennies on the dollar.
- antr 13y ago> you're getting it for pennies on the dollar What are you talking about? Foursquare ain't getting anything for free, if anything that debt is now over $50m at a very conservative 15% Kd assumption.