Bad Business Moves Of 2011
Fremont: 2011 was a rollercoaster ride for the businesses and the economy alike. While the economy saw another recession hovering, the euro crisis, the debt crisis in U.S., it also saw a lot of companies in troubled waters. Here are few of the bad business moves of 2011.
Pocketing The Investors Money
AirBnB and Groupon saw a lot of hue and cry when they pocketed the funds that they raised from VCs. According to Wall Street Journal, when Groupon raised $1.1 billion from VCs, it used $956 million and used only the remaining 14 percent for its actual operations. Airbnb’s latest round saw the founders fishing out a cool $21 million into their personal accounts, while Foursquare’s founders took $4.6 million out of the total $20 million it raised. The ethical justification of all these founders pocketing the money raised from investors to scale up the operations was questioned. This move also saw venture capitalist Chamath Palihapitiya passing out on Airbnb’s $112 million round of funding with a justification that he backed out as the company had failed to distribute the funds across its employees.
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