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Perhaps "hate" is too strong a word, but the more I think about this, I find it hard to understand why Sequoia would force a sale here. Tony is a very successf
by BrandonWatson 17y ago
Perhaps "hate" is too strong a word, but the more I think about this, I find it hard to understand why Sequoia would force a sale here. Tony is a very successful guy, who has built something quite amazing and unique. The public market would most likely be very receptive to the Zappos story. Their unique blend of customer focused service has erected quite a defensible market position, and I suspect that once they acquire a customer, the customer lifetime value is quite high.
With all that in mind, why would Sequoia force a sale? They wanted to report a liquidity event. They put a short term profit motive above the desires for building an even more successful business, which, according to all accounts, Zappos stood a very good chance of doing.
- ajju 17y agoAssuming, again, that the speculation that this was a forced sale is true, there could be any number of reasons for it - ranging from the simple (Sequoia needs a good exit in this bleak environment for their limited partners and don't have any better alternatives) to the complex (Sequoia's analysis of the macro-economic conditions and their understanding of Zappos' business disagree with your own).
- tonystubblebine 17y agoI wouldn't be surprised if "forced" is even too strong of a word. What would you do if some folks who had loaned you millions of dollars and who had presumably worked with you to make your company successful, said, "hey, is there any way we could get our money out?" VCs aren't servants to the entrepreneurs, they're partners. When you take $20 from a customer, do you feel a sense of obligation to make sure they get something in return? That sense of obligation doesn't get smaller when the amount goes up.