Just how close Google was to handing over $6 billion for Groupon, no one can say for sure. What we do know is that Groupon has converted that interest (or perception of such) into a cool $500 million in venture capital funding!
According to an SEC filing (reported by Fortune.com), Groupon has found $500M of the $950M it is hoping to raise. What’s the purpose of such funds? Well, a good chunk of it will go towards a cashout for shareholders…
One purpose of Groupon’s massive new round is to provide liquidity for existing shareholders, including those who may have been ticked off that the company spurned Google. Fortune has learned that all Groupon shareholders recently received a letter offering to buy back up to 15% of current stock holdings, and the SEC filing indicates that $345 million of the $500 million will be used to cash out insiders (both investors and management).
Yes sir, there it is in black and white:
Of course, this is where we get to insert some random joke about how Groupon’s investors are subject to the same ridiculously high revenue split as the coupon company’s customers.
Oh, and I appear to be in the wrong business. Brokering venture capital deals is where the easy money is. Check out the amount of commission being paid to the company that put this deal together!