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This is pretty common. When startups don't sell for above their valuations, the investors are going to get their money back first (and in varying cases more, d

This is pretty common. When startups don't sell for above their valuations, the investors are going to get their money back first (and in varying cases more, depending on liquidation preferences). Pulled GetSatisfaction's tables from PitchBook, take a look at their B round: http://i.imgur.com/zUzDrFp.png http://i.imgur.com/zUzDrFp.png Post valuation at over $50M - no data yet on the amount of the acquisition, but if it was equal to that or less (or if the liquidation preferences for the A/B rounds were greater than 1X) it's pretty clear the founders wouldn't have gotten anything from the acquisition. But as someone else pointed out, it IS likely they got a salary from those early rounds of investors, which, is better than most startup founders see.

TheOsiris 12y ago
does PitchBook show whether the founders cashed out some stock or not? I doubt they raised series B without cashing out some money
- bri3d 12y ago
  Founder liquidity in a B round for a company that wasn't extremely competitive for capital seems pretty uncommon, IMO, especially back when Get Satisfaction would have been raising (I remember "Series FF" and other founder-preference vehicles being novel in the ~2006 era). Why do you think they'd have cashed out at a series B?
PhantomGremlin 12y ago
Thanks for posting those tables. The thing I was surprised by is that the preferred stock had a 6% dividend. Is that common nowadays? Back around 30 years ago when I was at startups, the preferred didn't get any dividends. It existed to allow the VCs to stay ahead of founders/employees in case of IPO, liquidation, etc. Not to collect a dividend along the way.
neil_s 12y ago
The acquirer, Sprinklr, is funding multiple acquisitions out of their recently raised $46M, so it's fairly certain that the amount of this acquisition was less than $50M
- myth_buster 12y ago
  What about stocks?

TheOsiris 12y ago

does PitchBook show whether the founders cashed out some stock or not? I doubt they raised series B without cashing out some money

bri3d 12y ago
Founder liquidity in a B round for a company that wasn't extremely competitive for capital seems pretty uncommon, IMO, especially back when Get Satisfaction would have been raising (I remember "Series FF" and other founder-preference vehicles being novel in the ~2006 era). Why do you think they'd have cashed out at a series B?

PhantomGremlin 12y ago

Thanks for posting those tables. The thing I was surprised by is that the preferred stock had a 6% dividend. Is that common nowadays? Back around 30 years ago when I was at startups, the preferred didn't get any dividends. It existed to allow the VCs to stay ahead of founders/employees in case of IPO, liquidation, etc. Not to collect a dividend along the way.

neil_s 12y ago

The acquirer, Sprinklr, is funding multiple acquisitions out of their recently raised $46M, so it's fairly certain that the amount of this acquisition was less than $50M

myth_buster 12y ago
What about stocks?