Not long ago, the daily deals giant Groupon was the toast of Chicago, a press darling that received the blessing of Oprah Winfrey, was commended by Forbes as the “fastest growing company ever,” and even reportedly spurned a multibillion-dollar buyout offer from Google. A Chicago Tribune headline from last December summed up its place in […]Continue
Groupon’s troubles are bad — and they’re likely to get worse, says Sam Hamadeh, founder of the New York-based financial analysis firm PrivCo. Since Groupon released its third and most recent amended S-1 document — excluding what it pays out to merchants, and revising its reported 2010 revenue of $713 million down to $313 million as a […]Continue
The New York Times recently wrote a piece suggesting that “Groupon’s fate hinges on words.” Unlike Google, which “had secret algorithms that gave superior search results,” or Facebook, which “provided a way to broadcast regular updates to friends and acquaintances that grew ever more compelling as more people signed up,” in the view of the Times, […]Continue
One of the most intriguing factoids to come out of Groupon’s IPO filing today was that the daily deals website didn’t raise $946 million earlier this year for expansion. Instead, it raised the money primarily to provide huge pay days for the company’s founders, insiders and early investors.
Of the total amount raised, $136.2 million went to working capital and general corporate purposes, according to the company’s S-1.
The remaining 86% percent of the capital, or $809.8 million, was used to “redeem voting and non-voting common stock from our existing stockholders at a purchase price of $15.795 per share (on a post-stock split basis), and Series D preferred stock and Series E preferred stock from our existing stockholders at a purchase price ofContinue
The venture capital business is rooted in personal relationships. Not only do many firms refuse to meet with founders who aren’t referred to them by someone in their network, but their strong preference is to back entrepreneurs who they’ve funded before. That’s a good thing for the Chevy Chase, Md.-based firm New Enterprise Associates, which […]Continue
With regard to most startups, I don’t think so, but given real estate prices in the Windy City, I wish it were. Consider this 4,700-square-foot penthouse apartment whose 360-degree views, gourmet kitchen, steam room and more will be shown to prospective buyers on Saturday. Starting bids for the property? $600,000. Try finding that much real estate for less than a few million dollars in Northern California.Continue
Read the Chicago papers, and you’re a lot less likely to read about a new entrepreneur on any given day than sales for fast-food giant McDonald’s Corp., based in nearby Oak Brook, Il. It’s enough to make Eric Lefkofsky, a highly successful serial entrepreneur and investor, want to scream. “Chicago is an incredible city,” he […]Continue