After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
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Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#2Justin.tv seems like it's doing really well (at least from the outside), which makes it difficult to understand why they keep launching new products.
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#3How would this work for the investors of Justin.tv? I know that Justin.tv has a stake in Socialcam, but to go from owning 100% of the value to something less seems like a lousy deal for the investors.
I suppose you could make the argument that this will enable Socialcam to grow more quickly and thus drive higher value for everyone, but it seems like quite a high risk.
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#4Interesting. I suspect that Instagram are also contemplating adding video sooner or later, given that in their API images are to be found in the "media" branch, and for each entry there the data-type is labelled as "image".
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#5Justin.tv seems like it's doing really well (at least from the outside), which makes it difficult to understand why they keep launching new products.
Why not? They're continuing to create really great products that scratch their own itches and are allowing the company to grow.
Seems like they have the resources for it and the drive and ambition.
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#6How would this work for the investors of Justin.tv? I know that Justin.tv has a stake in Socialcam, but to go from owning 100% of the value to something less seems like a lousy deal for the investors. I suppose you could make the argument that this will enable Socialcam to grow more quickly and thus drive higher value for everyone, but it seems like quite a high risk.
Justin.tv owns some of it. What they're probably doing is having Socialcam issue some stock to investors, and to grant lots options to the founding team. Imagine that SocialCam has 100 shares now. They might have the company sell 50 shares to outside investors for funding (so Justin.tv owns ~67%, but that is 67% post-money, and the total value of the stake will be the same). Then the company could allocate 50 shares to an option pool for their founders. That dilutes Justin.tv's stake down to 50%. Nobody has to give anything up--the investors are putting in money, and the options are a form of employee compensation.
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#7Justin.tv's strategy of using their video-hosting infrastructure to aggressively pursue verticals within the video watching/sharing/hosting space is working out really well. They seem to have a knack for identifying how people use video and streaming on the web, and are creating products that serve the specific needs of each group.
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#8How would this work for the investors of Justin.tv? I know that Justin.tv has a stake in Socialcam, but to go from owning 100% of the value to something less seems like a lousy deal for the investors. I suppose you could make the argument that this will enable Socialcam to grow more quickly and thus drive higher value for everyone, but it seems like quite a high risk.
Justin.tv owns some of it. What they're probably doing is having Socialcam issue some stock to investors, and to grant lots options to the founding team. Imagine that SocialCam has 100 shares now. They might have the company sell 50 shares to outside investors for funding (so Justin.tv owns ~67%, but that is 67% post-money, and the total value of the stake will be the same). Then the company could allocate 50 shares…
I don't quite follow.
The investors in Justin.tv now own a smaller share (or none) of SocialCam, right? How is this allowed (without approval)? And who would approve it if growth is good?
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#9Earlier quoted context omitted.
Justin.tv owns some of it. What they're probably doing is having Socialcam issue some stock to investors, and to grant lots options to the founding team. Imagine that SocialCam has 100 shares now. They might have the company sell 50 shares to outside investors for funding (so Justin.tv owns ~67%, but that is 67% post-money, and the total value of the stake will be the same). Then the company could allocate 50 shares…
I don't quite follow. The investors in Justin.tv now own a smaller share (or none) of SocialCam, right? How is this allowed (without approval)? And who would approve it if growth is good?
That's certainly one way to paint the picture. Most of investing, though, is trying to grow the pie, not necessarily focusing on your specific piece.
I've been on the founder side (trying to convince investors to spin off a new company) and the pitch goes like this: Before, you had an ownership stake in 1 company with two products. After, you have an ownership stake in 2 companies. Both of these companies are out to grow, raise money and exit in their own right, and have teams solely devoted to hitting a home run. From that perspective, you could argue that you now own more than you did before, essentially by growing the pie.
Re: After A Hot Start, Justin.tv Spins Off Socialcam, Its ‘Instagram for Video’
#10[deleted]