Do the investors remain in control of the shares they acquired when they put the money in? If so isn't this like buying shares in a company for free?
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Viddy returns $18M of its $30M Series B
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Re: Viddy returns $18M of its $30M Series B
#12Can someone explain to me how this works? I've never heard of a company returning money except in the event of a shutdown.
In particular, does this mean that the VCs get correspondingly less equity?
Not necessarily. The company could have been revalued in the process (since the market prospects clearly changed).
To some extent, this might be a deal for Viddy (aka as good as it gets). If the investors are in control of the company, they could have just closed the shop and returned all the funds.
Re: Viddy returns $18M of its $30M Series B
#13It's really hard to say one way or the other what this is. "Recapitalization" is a hilarious euphemism for "gimme back my cash," but considering they're keeping a lot of what's in the bank and still going with their investors, it could also be a very good sign. What reasonable person would want more liability to investors than necessary?
Granted, the ~50% staff reduction probably sets off some alarm bells, but if it really is a matter of improving efficiency, that's actually really good business for a startup.
Unless I'm missing something... this is either news in both directions at once or neither. Now my head hurts.
Re: Viddy returns $18M of its $30M Series B
#14It's really hard to say one way or the other what this is. "Recapitalization" is a hilarious euphemism for "gimme back my cash," but considering they're keeping a lot of what's in the bank and still going with their investors, it could also be a very good sign. What reasonable person would want more liability to investors than necessary? Granted, the ~50% staff reduction probably sets off some alarm bells, but if it…
Here's my semi-educated guess on what's going on. I could be off, but I have some sense of app store ebbs and flows by now:
1) Viddy is hurting bad in terms of users -- You'll see that JJ has tens of millions of followers but the interactions and view counts on his videos are very, very low in comparison. It makes sense to give it back because their growth is probably very, very, low. If they are around 40-50th in Photo and Video they are definitely doing less than 10k downloads a day.
2) Viddy actually has quite a good app. They have a pretty solid team, and can ship quite quickly.
3) Apple is promoting the shit out of video applications. Even though no one is really using them* -- things like Vyclone, etc. Either they are hoping for one of these to really take off and cause iPhone sales in the same way Instagram did, or are about to introduce new technology which makes video-capturing much better/easier/etc in the same way that Instagram came at the perfect time for the iPhone 4's camera enhancement.
Since Socialcam's sale, Viddy is definitely in the best position in terms of Instagram-like video apps, so if there are new advancements in the iPhone 5+ that do make video more appealing somehow, they will be the go to app. That being said, video is hard, and no one like to watch shitty videos which is why I'm bearish on video apps in general.
*Vine is up there, but it's still an unproven quantity I would argue. Is it's current success tied to it's insane distribution network? Time will tell.
Re: Viddy returns $18M of its $30M Series B
#15It's really hard to say one way or the other what this is. "Recapitalization" is a hilarious euphemism for "gimme back my cash," but considering they're keeping a lot of what's in the bank and still going with their investors, it could also be a very good sign. What reasonable person would want more liability to investors than necessary? Granted, the ~50% staff reduction probably sets off some alarm bells, but if it…
Here's my semi-educated guess on what's going on. I could be off, but I have some sense of app store ebbs and flows by now: 1) Viddy is hurting bad in terms of users -- You'll see that JJ has tens of millions of followers but the interactions and view counts on his videos are very, very low in comparison. It makes sense to give it back because their growth is probably very, very, low. If they are around 40-50th in Ph…
Interesting; thanks for the insight. I still can't claim to really get it, but this definitely sheds at least some light on the subject.