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A $90k for 25% stake seems to devaluate the initial $500k investments. Are initial investors usually ok with this type of devaluation, or are they just happy t
by fuzzythinker 17y ago
A $90k for 25% stake seems to devaluate the initial $500k investments. Are initial investors usually ok with this type of devaluation, or are they just happy to see more funding since they don't want to put more money into it?
- leelin 17y agoI'm guessing it's a mistake in the article. End of Summer was not too long ago, so a company with about $500K in the bank should be worth more than $270K premoney. I just thought of another explanation: Maybe the TV show only airs if a deal gets done, so the founder reasoned the publicity was worth a bad valuation?
- joez 17y agoI doubt the part of accepting the money for publicity. I think they get plenty for just being on a nationally syndicated show. (Kudos to them on WSJ and Shark Tank) They might have even gotten better publicity for standing firm on their original offer. http://www.youtube.com/watch?v=SOSfMzwA5C0 http://www.youtube.com/watch?v=SOSfMzwA5C0 They accepted an offer with a 6 month buy out clause so it is possible they never intended on keeping the money. I just have major doubts about their numbers. The way the founders present them is very suave but thinking deeper in is really questionable. Other highlights from the show are in: They had 40% of University of Arizona (about 14k users) in 8th months. 30k revenue in 1 year. Not exactly a smashing success, but a start. Just a few doubts when examining them deeper.