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Comment by monero-xmr | Hacker News Reader

Why didn’t they hire an investment banker? If they were going to be acquired for $1 anyway, the muddled and sudden shutdown simply lost a huge number of their customers. This was moronic, they could have at least did an orderly bankruptcy and proceeded business-as-usual. Whoever is running this should never run stuff again. None of my failed businesses failed suddenly, we knew they were going to fail well before they did. We made life saving maneuvers but understood it was likely end-game.

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Rumors on twitter are that they got rugpulled by a creditor calling in the debt, under T&Cs, rather than running out of money with predictable timing.

Eg see: https://x.com/pitdesi/status/1873872070331032051

A creditor calling debt because you violated your covenants is not a rugpull. That's how creditors insure they can be paid back before you predictably run out of money.

Well, I can see how it might be a rugpull or it might not. It depends on what the terms were and what the motivation was for invoking them. I don't have a dog in this particular fight.

Did they actually formally file for insolvency before the new buyout? If they did then there eventually should be an impartial report on this, otherwise we might never know exactly what happened.

tldr: that $60M series C was actually 37M + 23M venture debt from SVB who called the loan! (That is not a rugpull, that is exactly what the venture debt contract prescribes for this exact situation)

Top tweet reply is Matt Levine’s take (edit: wrong matt levine)

Additionally, fmr SVB employee replies: "SVB Canada’s loans were sold to National Bank who has some tech lending chops but no where close to SVB nor the flexibility."

That's the wrong Matt Levine mate :facepalm:

At this end of the rumour mill, the covenants themselves were not the rugpull. Rather from what I’m hearing two provinces away, it was that SVB issued the debt but National Bank (who acquired SVB’s Canadian debts) called it.

You posit that venture capitalists and acquirers would never dream of running down the clock?

I’m not sure you should be throwing words like moronic around so easily. It’s hard being a founder. Some emerge okay, others do their best and don’t.

It’s possible but something is very fishy about the whole thing. Absolute destruction of value, it isn’t an accidental event

also it’s a negotiating tactic by the acquirer, VCs do it too - why buy a distressed company today when you can run out the clock and get it for free

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