I get that, but I think this is an example of a desperate move. In order to have any value left for the founders and employees, the company will have to sell for some huge valuation that they are almost certainly not going to get.
I'm not questioning the decision on the Foursquare side anyway, although they are clearly avoiding releasing any data that would give people an understanding of the current state of the company. I question the decision on the part of the investors. This is a lot of money to put in, and for what? The best case might be a 2x-3x return, but in my opinion the median return on this is $0, all the money spent and virtually no value in the end.
I would imagine it's very hard for the management of FourSquare to let go emotionally, especially after hopes ran high in 2009/2010 and they had huge growth. It's clear that that growth has ended, and that they are now in a period of declining use. Combine that with an inability to monazite the existing user base and I see absolutely no hope of success.
I suppose they could pivot the company, but why would they do that? It would make far more sense to leave FourSquare and build a new company that didn't have all of FourSquare's baggage and dilution from investments in the old model.
I'm not questioning the decision on the Foursquare side anyway, although they are clearly avoiding releasing any data that would give people an understanding of the current state of the company. I question the decision on the part of the investors. This is a lot of money to put in, and for what? The best case might be a 2x-3x return, but in my opinion the median return on this is $0, all the money spent and virtually no value in the end.
I would imagine it's very hard for the management of FourSquare to let go emotionally, especially after hopes ran high in 2009/2010 and they had huge growth. It's clear that that growth has ended, and that they are now in a period of declining use. Combine that with an inability to monazite the existing user base and I see absolutely no hope of success.
I suppose they could pivot the company, but why would they do that? It would make far more sense to leave FourSquare and build a new company that didn't have all of FourSquare's baggage and dilution from investments in the old model.