I cant agree with that. When I invest, I have some expectations as to how that money should be invested, and for a company that is in desperate need of cash inflow to sustain its growth, thats where it should go. Period. Not to the coffers of early investors and employees. No one has any problem with them cashing out a part of their equity. This however (almost 400 million went to an early investor couple!) was a careless and completely selfish act to line one's pockets.
And now, they are ready for the next round, and only this time, its the public who stand to get scammed.
When I invest, I have some expectations as to how that money should be invested
More than that, you have a prospectus (or term sheet) that will specify those kinds of things. In this case, the Series G investors knew exactly where the money was going, and they were ok with that.
As for the public getting scammed, the SEC has a metric buttload of regulations aimed at seeing that that doesn't happen.
I am not worried about the Investors who led the G round being scammed out of anything. They knew what they were getting in to. I was pointing out how irresponsible this move was, on the part of the Groupon team to allow this to happen. One one side, you have a company bleeding money aching for growth and spending over 200 million just in Ads and over 320 million in salaries to their 8000 sales staff. And you choose to cash out instead of plowing it in to maybe eking out a better profit margin than last year? They are not even trying, for Christ's sake!
And I dont have to look that far back to see how effective the SEC has been, with their metric ton buttload of regulations. You dont live in the US, do you?
And now, they are ready for the next round, and only this time, its the public who stand to get scammed.