Re:Viddy returns $18M of its $30M Series B
by aaronbrethorst on Tuesday May 07, 2013 @09:23PM
(#5671932)
Can someone explain to me how this works? I've never heard of a company returning money except in the event of a shutdown.
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Re:Viddy returns $18M of its $30M Series B
by ghshephard on Tuesday May 07, 2013 @10:07PM
(#5672092)
It's usually more likely to happen when you have a board that is firmly controlled by the people who've invested the money in the company, and, when they see a significant change in market conditions (or makeup of the company) - decide that their ROI will be greater if they withdraw some of that investment.
I'd be interested in knowing, though, what the precise financial transaction looks like. Dividend? I would think that they would try and avoid those tax consequences.
IANAA, but "return of capital" is non-taxable.
Re:Viddy returns $18M of its $30M Series B
by ghshephard on Tuesday May 07, 2013 @10:19PM
(#5672135)
Re:Viddy returns $18M of its $30M Series B
by jcampbell1 on Tuesday May 07, 2013 @10:11PM
(#5672108)
My guess, it is treated like a stock buyback of preferred shares.
Re:Viddy returns $18M of its $30M Series B
by outside1234 on Tuesday May 07, 2013 @09:45PM
(#5672005)
In particular, does this mean that the VCs get correspondingly less equity?
Re:Viddy returns $18M of its $30M Series B
by adventured on Wednesday May 08, 2013 @01:37AM
(#5672701)
Not necessarily. The company could have been revalued in the process (since the market prospects clearly changed).
To some extent, this might be a deal for Viddy (aka as good as it gets). If the investors are in control of the company, they could have just closed the shop and returned all the funds.