The Lessons Google Ventures Learned from Secret
bits.blogs.nytimes.com
bits.blogs.nytimes.com
I think the biggest lesson here is: just because a startup is being run by ex-Google employees does not mean it is going to succeed or be successful in the long run. Great for getting on Techcrunch and having the media talk about you, but once those 15 minutes are up, you're a real business and it becomes less about who you are and more about how you are going to make money and grow your business.
> David Byttow and Chrys Bader-Wechseler, had previously received $3 million dollars apiece through a mechanism known as a secondary sale in their $25 million Series B fundraise last July.
> Secondary sales are pretty simple to understand. When a company raises funding, that funding goes directly to the company as cash on the balance sheet, which is why it is known as primary. Secondary is when a founder or even other employees sell part of their personal shares in the company at the price of the round. That money doesn’t go to the company but into the seller’s pockets.
The VC's who bought the $6M worth of stocks knew what they were signing up for.
Definitely agree. I was pointing out how this move is just one in a series of many that doomed Secret. When you're trying to gain traction and get users, you don't take money for personal gain. Who knows if that six million dollars might have helped Secret ride out the storm and still be around today, who knows. I think the VC's are too blame as much as the founders of Secret are.