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Marissa Mayer will close her old AI startup, sell assets to her new AI startup

techcrunch.com

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Re: Marissa Mayer will close her old AI startup, sell assets to her new AI startup

#21

Post by ajross »

prasadjoglekar wrote: post #8
newfocogi wrote: post #5

"Former Yahoo CEO Marissa Meyer is closing the doors on her consumer software startup Sunshine, and is selling the company’s assets to her new AI startup, Dazzle" and "all of Sunshine’s employees will move to the new company". Under what conditions is it better to buy the assets and hire the employees instead of just change the name and product offering of the company? Is it just to get the investors off the cap tabl…

Clean cap table is quite valuable.

It's "valuable" to the company and to new investors. It's quite the opposite to old investors. In the world of public companies, a "liquidate a shell company" trick like this is presumptively fraud. If you want to liquidate the company you have to buy back the stock at market price, not whatever your purchaser is offering.

It's legitimate only if the existing investors are getting enough liquidity back from the sale to make it worth the transaction. The article says that "almost" all the investors are on board, so... maybe.

Re: Marissa Mayer will close her old AI startup, sell assets to her new AI startup

#22

Post by ipsum2 »

mortoc wrote: post #16

"That product saw little adoption due to privacy concerns about privacy, and pretty much languished." - A professional writer

Typos and grammatical errors are common in journalism nowadays, even with formerly respected organizations like APNews.

Re: Marissa Mayer will close her old AI startup, sell assets to her new AI startup

#24

Post by pkphilip »

philipwhiuk wrote: post #2

What's the benefit of this paperwork re-arrangement?

You are buying the assets from the previous company but not its liabilities. So the previous company can file for bankruptcy without affecting the new company.

Also, since the new company is buying the assets, it improves the books in the old company and the extra funds will be used to pay off some of the debtors without the debtors being able to access the assets in the new company.

Re: Marissa Mayer will close her old AI startup, sell assets to her new AI startup

#27

Post by adastra22 »

mbesto wrote: post #15
prasadjoglekar wrote: post #8

Earlier quoted context omitted.

Clean cap table is quite valuable.

Clean cap table and she probably provided a decent amount of the funding for the first startup. It's also more than likely a tax thing here. I don't think people ought to get too obsessed with the contractual details on this one.

If she has any investors with preferences, she probably isn’t seeing a dime.

Re: Marissa Mayer will close her old AI startup, sell assets to her new AI startup

#28

Post by bookofjoe »

bix6 wrote: post #13
prasadjoglekar wrote: post #8

Earlier quoted context omitted.

Clean cap table is quite valuable.

Valuable to new investors. Old investors get hosed. I really struggle with these sorts of situations. She’s presumably doing something similar with the new company so all the old investors who didn’t participate (presuming a pay to play) get hosed. Is that really fair?

The chosen and the hosen

Re: Marissa Mayer will close her old AI startup, sell assets to her new AI startup

#30

Post by lesuorac »

ipsum2 wrote: post #22
mortoc wrote: post #16

"That product saw little adoption due to privacy concerns about privacy, and pretty much languished." - A professional writer

Typos and grammatical errors are common in journalism nowadays, even with formerly respected organizations like APNews.

I think they're pointing out that the sentence is symmetric.

"That product saw little adoption" - "and pretty much languished."

"privacy concerns" - "about privacy"

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