Under what conditions is it better to buy the assets and hire the employees instead of just change the name and product offering of the company? Is it just to get the investors off the cap table?
And indeed this article says “Almost all of Sunshine’s investors, who include Norwest Venture Partners, Felicis Partners, and SV Angel, have signed off on the deal, Wired cited the sources as saying.”
So the investors think whatever is happening is a fair deal.
Do you know which investor isn’t cruising over?
One way to look at it is do you want zero or do you want pennies on the dollar for it?
Is it crappy? Yeah. Doubly so if being abused by the founder. There is a version of this that is just the best of two bad options though.
It leaves a bad taste in my mouth when the founder doesn't share the same pain as the investors and the employees but such is life and it's hard to draw a line anyway, especially for someone super rich and with star power like her.
And should those idiots be avoided, as well?
Norwest Venture Partners: A venture capital firm that invested in Sunshine.
Felicis Partners: A venture capital firm that also backed Sunshine.
Ron Conway's SV Angel: An early-stage venture fund that invested in Sunshine.
Archetype Agency: A public relations firm that was a Sunshine shareholder.
This time it will different;)
It's legitimate only if the existing investors are getting enough liquidity back from the sale to make it worth the transaction. The article says that "almost" all the investors are on board, so... maybe.
Obviously, getting some people off of obligation lists is one of them. There could be others?
In this case though with a new name and product that won't be an issue.
[1] someone else will remember the name of that company - it escapes me
https://apnews.com/article/publishers-clearing-house-bankrup...
The company that I’ve forgotten was selling some kind of software offering.
There are non-financial liabilities, as well.
https://kddk.com/2015/07/30/successor-liability-in-the-purch...
Other impacts can include future potential NewCo lenders being pretty leery about getting involved with the same people. It's also not a great look for the founder(s)/senior execs in terms of future resume - unless there are extenuating circumstances which justify doing it. An example can be something like a fundamental disagreement between co-founders who are major shareholders. In that scenario this may not be to shaft debtors but rather for the majority co-founders, investors and key employees to 'dump' a minority non-cooperating co-founder who's no longer involved with the company, has a "change of control" veto and won't sell their shares but can't stop an asset sale. Basically the board approves the sale and the key execs/employees all vote with their feet. The original OldCo shareholders still own those shares, they're just worthless without the people, IP, assets, etc. In such a case, the non-cooperating shareholder might have grounds to sue but one defense can be a solid paper trail showing the company treated them fairly, offered to buy out their shares at fair market value and was basically forced into this as the only alternative.
Soft liabilities may be significant. For example here we are talking about the move. The headline “Sunshine launches Dazzle” is about a failing company and we wouldn’t be talking about it on the HN front page.
And if you are adequately capitalized (you probably are not), starting a new company is an easy business decision. And if you are a serial entrepreneur, starting new companies is what you do.
Old investors are welcome to put new money into the new venture, of course.
This strikes me as a particularly funny typo
Many such cases.
- A professional writer
"That product saw little adoption" - "and pretty much languished."
"privacy concerns" - "about privacy"
* before this comment gets a single upvote, somebody will have vibe-coded this
But if you gave both a month to write the best 400 word article they could possibly generate on a particular subject, the human author would dominate. Give them time to make a few drafts, to research and think and talk to people, to edit and reorganize and restart and rehearse, and they'll produce something that's worth being read and re-read and considered thoughtfully by thousands of people.
The problem is that the journalism industry has become optimized to generate content to be skimmed by a few people and read by thousands of bots.
What proof is there for this?
Unless this grammatical error is extremely common, LLMs should make this an easy one to detect (relatively low probability of next token)
Why not use "AI" to fix human error (like this one, presumably) instead of expecting people to fix "AI" output
Yes. She made a tremendous amount of money for herself while failing miserably at Yahoo!.
Oh, you mean attempts at getting workable, groundbreaking new products out into the market with success? No.
I was at Yahoo from 2004-2011, so I've got my opinions, but I think failing miserably at Yahoo is like the default option. It was a great gig to take in 2012 --- if you do well, well then it's clearly your leadership; if you don't do well, it's that Yahoo wasn't salvageable.
Yahoo was valued at $44b at one time, and the $1b it put in Alibaba was valued at $40b. So 90% of Yahoo was the Alibaba investment. There was a whole spin off core business to separate it from the investment part drama, years and years of distraction and investors and board people who wanted their ~40x instead.
Yahoo Japan was also a joint venture between Yahoo and Softbank, with Yahoo holding about 50% of the ownership.
At some point, Yahoo stock was regularly trading at or below the estimated value of the overseas holdings. The part of the company that actually did stuff was valued at zero or less. In the acquisition, yahoo stockholders got cash for the operating business plus shares in holding company formed around the overseas holdings ... Over time, the holding company sold the holdings and distributed the proceeds to shareholders and ceased operating.
I'm sure the new venture will be just as disruptive.
Mayer's track record is good enough that she's able to attract new investors easily enough but I wonder if they actually expect a return or if they see it as a lottery ticket.
I mean it is a hard to make people give you other peoples money which is worth investing in.
The company had raised about $20 million in 2020.
$20K per free app download?
I think these 2 apps were experiments.
They probably wanted organic downloads only, in order to identify real user needs / find PM/F.
Otherwise, it's hard to explain why they wouldn't spend money on marketing/advertising.
An investor is a gambler. Not just on past success, although I'm sure Marissa has had some successes even if people don't know them.
They gamble on: 1) Has this person got the experience (good or bad) to run a business. A failed business leader is a better gamble than someone with no experience. 2) Does this person have a strong network so they can realistically pull in some really good people? 3) Has this person raised capital before? 4) Do they have a convincing narrative about why they have failed and what they might do differently? 5) Is the potential ROI high? 6) Do I have anything else I could invest in instead with better odds?
If I think as an Investor and not as an Engineer, I am not surprised that she has succeeded and I wish her all the best.
e.g. VCs invest in startups commercializing open-source foundational/infrastructure projects not only for the financial RoI, but also because it helps their portfolio companies succeed faster while maintaining a smaller headcount or spending less on non-core R&D.
I like Marissa Mayer, but I'm shocked at how little investment these apps got over the years, despite being the *only* apps they offered. What was this startup lab even doing? For five years!!
This sentence reeks AI-writing
philipwhiuk•4mo ago
nextworddev•4mo ago
pkphilip•4mo ago
Also, since the new company is buying the assets, it improves the books in the old company and the extra funds will be used to pay off some of the debtors without the debtors being able to access the assets in the new company.