Not so long ago, Theranos was flying high, its claims that it was upending the medical diagnostics business largely accepted by the public. Behind the scenes, however, some employees were growing wary of those claims, with at least one eventually reaching out to regulators to report the company’s failure to report its questionable test results. […]
Legal
A Strange New Battle Begins Over Who Owns Cruise Automation
A strange new battle over valuable startup equity took another step forward late yesterday afternoon. Jeremy Guillory, a Bay Area mechanical engineer, has filed a cross-complaint against 2.5-year-old Cruise Automation and its longtime CEO, Kyle Vogt. At issue: Guillory says that the self-driving car company — which developed an autopilot system for existing cars and is […]
VCs Aren’t the Only Ones Watching Those Mutual Fund Markdowns
VCs have been watching with great interest as mutual funds mark down the value of some of their privately held, illiquid investments, including shares of Dropbox, Zenefits, and Snapchat. Turns out the SEC is watching, too. A new Wall Street Journal report says the agency “has been asking more questions of large fund firms about […]
Amazon Softens Blow of Times Piece, But Attorneys Warn Against Celebrating Too Soon
In recent days, Amazon has worked to soften the blow of a blistering piece about its culture in Sunday’s New York Times. In the article’s immediate aftermath, Jeff Bezos wrote a memo to employees, saying the account “doesn’t describe the Amazon I know or the caring Amazonians I work with every day.” He further pointed employees […]
The Venture Math Behind All These Giant Financings
To better understand unicorn valuations, the law firm Fenwick & West recently analyzed the financing terms of 37 U.S.-based venture backed companies that raised money at valuations of $1 billion or more in the 12-month period ending March 31. Among the firm’s findings about these financings is that only a quarter were led by “traditional” […]
Did Pinterest Just Change the Game?
In tech, employees often join startups with the idea that they might become millionaires if those companies go public or are sold. But even experienced startup veterans often underestimate the costs involved in exiting one’s stake. Purchasing equity that has appreciated can run into the hundreds of thousands of dollars — if not millions — […]
Attorney Jay Gould on the Pros and Cons of a Public Venture Offering
Earlier this week, I wrote that venture capitalists should take advantage of new general solicitation rules that allow them to advertise when they’re in fundraising mode. I was expecting pushback from skeptical VCs; what I heard from them instead was confusion about how they could advertise without breaking the rules. For help, I phoned Jay Gould, a partner […]
The Case for Embracing General Solicitation: VC Edition
Ask VCs whether top venture firms are liable to take advantage of the new general solicitation rules, and the answer is often a barely suppressed laugh. It’s easy to understand why some might look down their noses at the changes. VCs have been operating like a private club for a long time, and they tend to […]