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Lossmaking companies launching in-house VC funds while continuing to raise money is a huge red flag. It suggests operators who prefer to be fund managers, two very different roles.
I'm not really surprised by this. At a drone conference in 2016, I first saw presentations from them among many other interesting technology vendors. They had a "vision" that they carefully presented on stage of what they would do, but everyone else at the show was either demoing technology or taking orders. Airware had a "call us for pricing" kind of attitude. Meanwhile, its been a year since Verizon acquired Skywar…
Out of curiosity, how much drawdown do the VCs typically deal with during these liquidations? They get whatever's left based on their liquidation preference and preferred stockholder preference, leaving nothing for common stock holders including the founders themselves. Whats a typical drawdown look like?
When VC backed companies shutdown, the logistics are typically outsourced to specialist firms like Sherwood Partners [1]. Instead of a formal bankruptcy in federal court, an alternative process called "assignment for the benefit of creditors" is used to distribute assets to creditors under state law. Patents are usually sold to patent trolls or companies seeking a defensive portfolio. An attempt is usually made to se…
whats the drawdown look like? how much money do VCs lose, percentage wise given their liquidity preference?
there is no scatterplot or case study or statistics at all? maybe an obscure SSRN article? Publication from a VC itself?
Out of curiosity, how much drawdown do the VCs typically deal with during these liquidations? They get whatever's left based on their liquidation preference and preferred stockholder preference, leaving nothing for common stock holders including the founders themselves. Whats a typical drawdown look like?
i guess it depends on if they have anything to sell...i bet most software startups would have a pretty significant drawdown unless they've made some unique ip that's worth something.
But it’s true most of the money went to employees.
2) hardware in it of it itself is defensible/a moat because apparently software first companies may not know how to do it well
3) software for hardware is particularly dangerous because its you can get pushed off of someones hardware platform in favor of a homegrown, good enough, alternative
I'm not really surprised by this. At a drone conference in 2016, I first saw presentations from them among many other interesting technology vendors. They had a "vision" that they carefully presented on stage of what they would do, but everyone else at the show was either demoing technology or taking orders. Airware had a "call us for pricing" kind of attitude. Meanwhile, its been a year since Verizon acquired Skywar…
One other usecase with a lot of potential is inventory control and counting in warehouses. Not small articles, but for industrial warehouses and larger products drones combining bar code scanners and visual artical identification can improve things considerably. Fraunhofer ran some first test like two years in Germany. No idea what came out of it.
(disclosure: I work for OTTO Motors, which has customers in this space)
https://blog.ycombinator.com/airware-yc-w13-raises-10-dollar...
I'm not really surprised by this. At a drone conference in 2016, I first saw presentations from them among many other interesting technology vendors. They had a "vision" that they carefully presented on stage of what they would do, but everyone else at the show was either demoing technology or taking orders. Airware had a "call us for pricing" kind of attitude. Meanwhile, its been a year since Verizon acquired Skywar…
Earlier quoted context omitted.
When VC backed companies shutdown, the logistics are typically outsourced to specialist firms like Sherwood Partners [1]. Instead of a formal bankruptcy in federal court, an alternative process called "assignment for the benefit of creditors" is used to distribute assets to creditors under state law. Patents are usually sold to patent trolls or companies seeking a defensive portfolio. An attempt is usually made to se…
yes, I've heard of California's ABC liquidation process, which also blocks creditors. whats the drawdown look like? how much money do VCs lose, percentage wise given their liquidity preference? there is no scatterplot or case study or statistics at all? maybe an obscure SSRN article? Publication from a VC itself?
Common shares go to zero (as they should).
> Airware launched its own Commercial Drone Fund for investing in the market in 2015 Lossmaking companies launching in-house VC funds while continuing to raise money is a huge red flag. It suggests operators who prefer to be fund managers, two very different roles.
I know of at least two really prominent cryptocurrency ICOs that are in this boat.
(As a side note, I wonder how often the opposite situation - an investor who gets so excited that they found a company - occurs, and whether that's a strong positive sign. I can think of at least 2 such big successes - Jeff Bezos with Amazon and Jim Clark with Netscape - and a bunch of more minor ones, like FriendFeed or TripleByte.)