Viddy returns $18M of its $30M Series B
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Viddy returns $18M of its $30M Series B
1–10 of 15 posts
Re: Viddy returns $18M of its $30M Series B
#2Can someone explain to me how this works? I've never heard of a company returning money except in the event of a shutdown.
Re: Viddy returns $18M of its $30M Series B
#3Can 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?
Re: Viddy returns $18M of its $30M Series B
#4VC probably got over 50% votes and forced this on them. Valuation goes back down.
Re: Viddy returns $18M of its $30M Series B
#5Can someone explain to me how this works? I've never heard of a company returning money except in the event of a shutdown.
It's usually more likely to happen when you have a board that is firmly controlled by the people who've invested the money in the company, and, when they see a significant change in market conditions (or makeup of the company) - decide that their ROI will be greater if they withdraw some of that investment.
I'd be interested in knowing, though, what the precise financial transaction looks like. Dividend? I would think that they would try and avoid those tax consequences.
Re: Viddy returns $18M of its $30M Series B
#6Can someone explain to me how this works? I've never heard of a company returning money except in the event of a shutdown.
It's usually more likely to happen when you have a board that is firmly controlled by the people who've invested the money in the company, and, when they see a significant change in market conditions (or makeup of the company) - decide that their ROI will be greater if they withdraw some of that investment. I'd be interested in knowing, though, what the precise financial transaction looks like. Dividend? I would thin…
My guess, it is treated like a stock buyback of preferred shares.
Re: Viddy returns $18M of its $30M Series B
#7Can someone explain to me how this works? I've never heard of a company returning money except in the event of a shutdown.
It's usually more likely to happen when you have a board that is firmly controlled by the people who've invested the money in the company, and, when they see a significant change in market conditions (or makeup of the company) - decide that their ROI will be greater if they withdraw some of that investment. I'd be interested in knowing, though, what the precise financial transaction looks like. Dividend? I would thin…
IANAA, but "return of capital" is non-taxable.
Re: Viddy returns $18M of its $30M Series B
#8Earlier quoted context omitted.
It's usually more likely to happen when you have a board that is firmly controlled by the people who've invested the money in the company, and, when they see a significant change in market conditions (or makeup of the company) - decide that their ROI will be greater if they withdraw some of that investment. I'd be interested in knowing, though, what the precise financial transaction looks like. Dividend? I would thin…
IANAA, but "return of capital" is non-taxable.
Re: Viddy returns $18M of its $30M Series B
#9When Viddy raised money, it was when folks were jumping on the who will be the "Instagram of video" bandwagon.
Socialcam and Viddy appeared to be the front-runners for that, but then certain things got in the way
- FB cracked down on both for being aggressive with people's feeds. This killed growth.
- SocialCam got acquired for $60M by Autodesk which as a comparable transaction wasn't very favorable for Viddy (on a price/user valuation multiple basis since there was little to no revenue)
- Investors had control of the board and likely decided based on the above and other factors (such as company founders departing) that this was throwing good money after bad and so decided to take their money back
Re: Viddy returns $18M of its $30M Series B
#10Do 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?