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Right, and another factor to consider is what percentage of the company was owned by investors. After a series B, they may have owned a majority. Apart from exerting pressure, it’s possible that this decision was made 100% by the investors and the founder(s) had no choice. It could also be considered poor form for a founder to make this public if that’s what happened.

It’s important to understand who is actually in charge before assigning blame to anyone.

If that were the case, why wouldn't the CEO say so?

I probably would have in their shoes, but that is one of many reasons I am not CEO. Bosses tell polite fictions that preserve relationships.

Polite way to say that. Self-preservation almost always outweighs transparency regardless of the whether the truth is good or bad

I've had some very close relationships with C levels at some big and medium companies. I've caught them lying in varying degrees more than once.

Sometimes though the job demands it. They're potentially not allowed to disclose something which leaves lying or saying nothing as the only other options. This works well until someone already knows the truth -- has their own source of information.

I didn't take offense, I just learned not to take what they said at face value. It's not a bad lesson in general. C level executives often learn to be ruthless, depending on the org, they can end up in real internal power struggles as well.

> It’s important to understand who is actually in charge before assigning blame to anyone.

But also,

> It could also be considered poor form for a founder to make this public if that’s what happened.

I mean, they asked the CEO what was going on and he didn't seem to give good explanations. Especially if it wasn't his decision.

maybe he knows the actual explanation that would be satisfactory is also the one he is contractually or professionally bound not to give.

Airplane and Airtable share a lead investor, Thrive Capital who led both Airplane's Series B and also Airtable's Series D

That’s the answer right there

> - By 2023, with slowing growth, it's likely that Airtable was no longer able to raise additional funding. Best case was likely a down-round.

The author stated they had millions if not 10s of millions in the bank and a bit of runway. And they had already done layoffs. Based on this, they were not under pressure to raise or do a down-round.

Separately and related to a sibling comment, the fact that Thrive Capital invested in Airplane and Airtable means they can now have a positive "tombstone" for Airplane by saying it was an "exit" while receiving a bunch of their original investment back.

You’re right, the point I was trying to make but should have said more explicitly is that they raised at an inflated valuation that would make any subsequent “up” round more difficult to raise in the future, even if the growth trajectory improved.

> return money to investors

Do the investors care? If they're not making 100x return on an investment, will they truly care about 0.5x return? My feeling is that most would just say "OK, you have a good team, you have money in the bank, pivot and go wild".

Yes, they care, although this of course varies. Remember that in this situation: one of the founders had already left, another was "giving up", and other key employees had left. Tech companies were laying off like crazy, and your chance of getting your money back via another round was about 0%. Would you be willing to subsidize a bunch of jobs in a bad-trajectory company with disinterested/absent leadership? Or would you instead think to engineer an outcome like this where the employees get a job offer and a bonus, one of your other investments gets a chance at top talent, a serial entrepreneur founder remains happy with you, and you get some money back?

Depending on timing (and here it was just over a year between the round closing and the acquisition), you may be able to easily re-deploy the capital you get back as another investment included in the same fund, and get another shot at a 100x return.

I'd be curious to hear what others think (particularly actual VCs, not just pretend ones like me) but this seems like a very rational outcome to me.

seed investors might write off a $500k check if their model is to write 30 of them and carry the fund with a 100x-er (and many investors are not so cool with losing), but $32M is not that model. A recent comparable example is Pitch - https://twitter.com/unamashana/status/1745417095809307080

This. As you get into later stages, check sizes become bigger and so does risk aversion + due diligence.

This was more likely a 0-0.1x return.

There's no chance the investors were happy with this- if a company had years of runway they almost certainly advised them to tough it out. Even a downround would be preferable compared to a total writeoff

Probably 0x for everyone except the last round investors who would get basically all the cash in the bank due to liquidation preferences, which is probably 0.66-0.84x return IMO.

bingo.

so many companies raised on sky high evaluations in the '21-'22 vintage, that its going to be a tough ask to keep going now the market has reset and valuations returned to the mean.