I literally can't parse the semantics of this headline
FanDuel founders to receive no cash from sale to Paddy Power Betfair
41–50 of 187 posts
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#42Can someone familiar with the current funding climate say if standard deals at all levels involve liquidation preference nowadays? As in, if Im considering a seed-round, will there be any sophisticated investors doing no preference? Have talked to some investors in the scene (UK) but cannot seem to get a clear picture on this. Is declining to accept a liquidation preference at seed level a red flag for any serious in…
> Is declining to accept a liquidation preference at seed level a red flag for any serious investor? Investors may be receptive to nixing liquidation preferences, particularly early on, if the founder agrees in writing to take no employment benefits. Asking an investor to relinquish their downside protection while retaining your own (a cash salary) is cause for further questions. That said, it's awkward to (a) ask fo…
From what gets printed in the press, it appears that lots of unicorns are having to agree to pretty high liquidation preferences in their latest rounds.
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#43Is there any reason for founders to ever deal with these investors ever again? Unless the investors were trying to retire, this seems incredibly short sighted.
From the perspective of a founder, I would be quite nervous about accepting an investment and drawing any kind of salary if the deal didn't include liquidation preferences. They are so standard (at least in North American tech) that if they were missing, I'd worry about their competence. Structuring a deal without LPs would mean that founders could push for extremely early exits, cash out with modest (though life cha…
I posted this in another reply, but it’s not the liquidation preferences themselves so much as the fact that it was the investors pushing for liquidation at a price point that precluded the founders from getting any money
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#44Earlier quoted context omitted.
Yes. Liquidation preferences are a thing, and getting mad about them isn't helpful. Also, from the details in the article about "drag along" and whatnot, the typical terms for a Silicon Valley investment appear to have even more drag along to them.
It’s not about there liquidation preferences themselves IMO, it’s that they were exercised in this manner. In this case it was the investors pushing for a liquidation under the limit, not the founders
That's not what I saw described in the article. The circumstances and results in the article sound like they would be reasonable for a Silicon Valley situation under typical VC funding terms.
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#45Can someone familiar with the current funding climate say if standard deals at all levels involve liquidation preference nowadays? As in, if Im considering a seed-round, will there be any sophisticated investors doing no preference? Have talked to some investors in the scene (UK) but cannot seem to get a clear picture on this. Is declining to accept a liquidation preference at seed level a red flag for any serious in…
As an investor who invests at the Seed to Series A stage, I can tell you that a non-participating 1x liquidation preference is standard. I would refuse to invest in any deals that didn't include it, but won't be asking for anything more.
I think it's a pretty fair term. It prevents investors getting screwed by a sale for less than the round valuation, which could look quite attractive to a founder who could get their first million, screwing their investors in the process.
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#46Can someone familiar with the current funding climate say if standard deals at all levels involve liquidation preference nowadays? As in, if Im considering a seed-round, will there be any sophisticated investors doing no preference? Have talked to some investors in the scene (UK) but cannot seem to get a clear picture on this. Is declining to accept a liquidation preference at seed level a red flag for any serious in…
As an investor who invests at the Seed to Series A stage, I can tell you that a non-participating 1x liquidation preference is standard. I would refuse to invest in any deals that didn't include it, but won't be asking for anything more. I think it's a pretty fair term. It prevents investors getting screwed by a sale for less than the round valuation, which could look quite attractive to a founder who could get their…
As a comparison, the startup I helped found in 2004 had a 2X liquidation preference -- that was a bad time to raise money. And as a founder, I'll happily take 1X.
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#47Can someone familiar with the current funding climate say if standard deals at all levels involve liquidation preference nowadays? As in, if Im considering a seed-round, will there be any sophisticated investors doing no preference? Have talked to some investors in the scene (UK) but cannot seem to get a clear picture on this. Is declining to accept a liquidation preference at seed level a red flag for any serious in…
As an investor who invests at the Seed to Series A stage, I can tell you that a non-participating 1x liquidation preference is standard. I would refuse to invest in any deals that didn't include it, but won't be asking for anything more. I think it's a pretty fair term. It prevents investors getting screwed by a sale for less than the round valuation, which could look quite attractive to a founder who could get their…
Thank you this is a helpful data point.
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#48I literally can't parse the semantics of this headline
FanDuel founders = The founders of FanDuel
To receive no cash = will not receive any money
From sale to = as a result of the sale of (FanDuel)
PaddyPower Betfair = to the company Betfair, which itself is owned by PaddyPower
The founders of FanDuel will not receive any money as a result of the sale of FanDuel to the company Betfair, which itself is owned by PaddyPower.
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#49I literally can't parse the semantics of this headline
FanDuel founders = The founders of FanDuel To receive no cash = will not receive any money From sale to = as a result of the sale of (FanDuel) PaddyPower Betfair = to the company Betfair, which itself is owned by PaddyPower The founders of FanDuel will not receive any money as a result of the sale of FanDuel to the company Betfair, which itself is owned by PaddyPower.
I figured it out, I was just making a lighthearted joke
Re: FanDuel founders to receive no cash from sale to Paddy Power Betfair
#50There's a lot more here, including responses from the founders: https://twitter.com/Suhail Seems the founding CEO spent 10 years there and got nothing, but a new CEO of 6 months walked away with $11MM.
The new CEO had previously been CFO since 2014. If his actions turned an unsalable company into a company that could be sold for $465 million then I'd say he's probably worth the $11 million. And the founding CEO surely drew a reasonable salary despite the company making a loss.
Yeah, to be clear, I'm not saying anyone did anything wrong.