Hype and plunder: Domo a new low for self-indulgent IPOs

"...points to a persistent flaw in Silicon Valley financing: the willingness to give start-up founders unassailable control of their companies, to the point that investors have no recourse if things go blooey."

That's not a flaw, it's a fundamental part of how it is meant to work.

The investors generally don't want to invest in companies run by a committee of investors... or else they would certainly do just that. Not to mention the larger investors could self-fund their own companies, if that's what they wanted to do, and retain all control. They are investing in the ideas, talent, and execution of the founders and other principal executives. It would be pointless to turn around and take control away from them.

(I think the other main theme of this article is that Domo is a mess... which is probably true. I only know what I read in the article, but it seems they have real revenue? It would have to more than double to match their rate of spending, but that can happen if they really provide value. It's hard to have confidence, though, in a CEO who is funneling money out of the company to his family and himself. Just the willingness to put that kind of cloud over the company, is a red flag.)

https://www.outline.com/9eSGhG

(i can't think of anyway to write a post recommending something that doesn't look like a spam link!)

Reminds me of a particular west coast startup I was associated with that took its final round of funding and blew most of it on a massive out-of-town party. Flew in all of the A-list bankers and tech types it could find.

The idea was to make the (failing) app look like a huge deal in the eyes of investors and get bought, thus fulfilling its exit strategy.

It worked.

One might safely assume that parent did just that, given the detail of what they posted.

How do people pulling down six figures a year (in somewhere other than SV) not have any money at the end of the month? One $4 latte and NewEgg impulse buy at a time. I get the impression that you're looking for the big ticket item(s). Maybe there isn't one. Maybe it's just one $1.8MM jet rental at a time. $1.8MM for jets + $600K for catering = $2.4MM. Do that about 350 more times and there's your $800MM. And I'm dead serious about the 350 number. I'll bet they pay too much for payroll because "only the best and brightest", the in-house gym with state-of-the-art equipment didn't come cheap, the $100K espresso machine, and on and on...

And then I don't understand the link between founder control and unethical behaviour. I've seen plenty of cases of corruption in investor-controlled companies. The article doesn't even attempt to make a concrete connection despite implying it over and over.