[bix6]

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?

[orionsbelt]

In my experience, the alternative to a pay to play or similar situation in which the old investors get hosed is the company dying, so they get hosed anyway. The fact is, a messed up cap table or zombie company is not attractive to new investors, so cleaning it up is an unfortunate necessity.

[bix6]

Maybe the company should just die? It failed and now they’re spinning out… why?

[collingreen]

It did die.

One way to look at it is do you want zero or do you want pennies on the dollar for it?

Is it crappy? Yeah. Doubly so if being abused by the founder. There is a version of this that is just the best of two bad options though.

It leaves a bad taste in my mouth when the founder doesn't share the same pain as the investors and the employees but such is life and it's hard to draw a line anyway, especially for someone super rich and with star power like her.

[bix6]

I want zero. Give the LPs a loss and move on.

[sleepybrett]

IMO the investors deserve a fair price for her 'buying' her old trash. I assume they won't get it and she'll be able to buy her old trash for pennies, probably 100 of them.

[orionsbelt]

A typical startup would require the consent of a majority of the investor shares for a sale of all the assets, so there would be investor protection and consent to this type of a transaction.

And indeed this article says “Almost all of Sunshine’s investors, who include Norwest Venture Partners, Felicis Partners, and SV Angel, have signed off on the deal, Wired cited the sources as saying.”

So the investors think whatever is happening is a fair deal.

[bix6]

51% of investors agreeing isn’t necessarily fair. That could be 1 or 2 large investors hosing everyone else.

Do you know which investor isn’t cruising over?

[pkaye]

The article says it was largely self funded so maybe she would lose the most.

[bookofjoe]

The chosen and the hosen

[bix6]

Lmao I’m stealing this

[bookofjoe]

Full disclosure: I stole it from a disgruntled anesthesiology resident c. 1990

[drivingmenuts]

Given that her old company basically pissed away $20 million, what kind of idiot would be willing to invest in her new company?

And should those idiots be avoided, as well?

[strangattractor]

According to Gemini:

Norwest Venture Partners: A venture capital firm that invested in Sunshine.

Felicis Partners: A venture capital firm that also backed Sunshine.

Ron Conway's SV Angel: An early-stage venture fund that invested in Sunshine.

Archetype Agency: A public relations firm that was a Sunshine shareholder.

This time it will different;)

[LightBug1]

Sometimes you do the hosing, sometimes you're the one getting hosed