Where Did Groupon’s Billion Dollars (Series G) Go?
Legal Pyramid Scheme, nothing more.The founders and early stage investors build something semi-viable, then spend all their efforts on marketing. Some of helps to grow the product, but most to convince bigger investors to buy them out and assume the risk.Why on earth would investors do this, you ask? Well, because they know that given the marketing, there will be other investors that will allow them to exit.Repeat until IPO, then ride the wave until the explosion. Time it right you make a fortune.Unfortunately, a minimum of effort goes into creating a lasting product with a proper valuation, so the moment that most investors realize that they aren't going to make their money back, ka-boom.Dot bomb all over again. Groupon is not a billion dollar company.