Startup Investing Still Tricky

What’s worth One Billion Dollars today and “tens of millions” tomorrow?

Try the Billion Dollar Startup Club member Fab.com. http://graphics.wsj.com/billion-dollar-club/

Founded in 2011 as a gay social site that moved into retail sales, it raised over $300 million from smart money venture capitalists.

But it expanded too quickly, according to the Wall Street Journal, and at one point was burning through $12 million/month. Sales did not keep up and the company spiraled downward. It’s now being sold to a vulture buyer.

The cautionary tale is here: http://blogs.wsj.com/digits/2015/03/03/boom-and-bust-fab-coms-fire-sale-is-cautionary-tale/

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
This entry was posted in Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Film, FINRA, Funding Portals, Investments, Jobs, Legislative Intent, SEC, Small Business, Venture Capital and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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