Comments on: BitTorrent Recapitalizes: $17 M Financing Undone, Valuation Plummets

By: Venture Capitalists V. Founders: Battle At Mochi Media

Venture Capitalists V. Founders: Battle At Mochi Media — Tue, 30 Jun 2009 05:36:34 +0000

[...] controversial venture capitalist – he was one of (or the) architect behind the extraordinary undoing of a $17 million round of financing for BitTorrent last year – we questioned whether Li violated his fiduciary duty [...]

By: BitTorrent.com perde 10 milhões de dólares em financiamentos « Henrique Picanço

Tue, 23 Dec 2008 15:29:56 +0000

[...] milhões de dólares (12,20 milhões de euros) numa terceira ronda de financiamentos? Há dias, o TechCrunch divulgou que a empresa foi obrigada a devolver parte da dívida à DCM, Accel Partners e DAG [...]

By: BitTorrent.com perde 10 milhões de dólares em financiamentos | Remixtures

Sun, 21 Dec 2008 21:56:11 +0000

[...] 17 milhões de dólares (12,20 milhões de euros) numa terceira ronda de finaciamentos? Há dias, o TechCrunch divulgou que a empresa foi obrigada a devolver parte da dívida à DCM, Accel Partners e DAG [...]

By: Scribd Raises $9 Million So You Can Continue To View PDFs Online | Fidicaro.net

Fri, 19 Dec 2008 13:16:08 +0000

[...] wouldn’t be used much, but in fact they do well with search engines, and sites like ours love to embed uploaded documents. Compete shows Scribd at 4 million monthly U.S. visitors. Scribd reports 50,000 documents uploaded [...]

By: Scribd Raises $9 Million So You Can View PDFs Online

Scribd Raises $9 Million So You Can View PDFs Online — Fri, 19 Dec 2008 08:49:05 +0000

By: Internet Valuations Sink Below Dot Com Bust Levels « Creative Capital

Internet Valuations Sink Below Dot Com Bust Levels « Creative Capital — Thu, 18 Dec 2008 21:53:17 +0000

[...] It also means that entrepreneurs should expect more painful down rounds, or rounds of financing at lower valuations than the previous round of financing. This is what happened to BitTorrent, as reported by TechCrunch. [...]

By: BitTorrent Gets an Unfavourable Funding Renegotiation

BitTorrent Gets an Unfavourable Funding Renegotiation — Wed, 17 Dec 2008 16:01:44 +0000

[...] recovering especially that it has managed to raise $17 million in a third round over the summer, TechCrunch reveals that this would be the wrong impression, since the company has actually returned most of [...]

By: BitTorrent And Everything Technology Related - BBCCCP.com

BitTorrent And Everything Technology Related - BBCCCP.com — Tue, 16 Dec 2008 22:48:44 +0000

[...] news: Bittorrent Inc. not actually worth that much Posted by: BBCCCP on 15th December 2008 Techcrunch reported earlier today that Bittorrent Inc. essentially had to renegotiate its latest round of funding under pressure of [...]

By: BitTorrent deshace la capitalización de 17 millones | Noticias, novedades, tecnología, programación - Bit & Bit

Tue, 16 Dec 2008 14:03:56 +0000

[...] La compañía creada a partir del protocolo, BitTorrent, no anda muy bien estos días. Deshace la capitalización de 17 millones de dólares que habían anunciado meses atrás y que el dinero que aún quedaba fue devuelto a DCM Accel Partners y DAG Ventures. Han decidido cerrar una nueva ronda de financiamiento de 7 millones por una valuación de la empresa mucho menor, 28 millones de dólares. Esto no afecta de ninguna forma a las redes P2P basadas en BitTorrent. [...]

By: A Blogger

A Blogger — Tue, 16 Dec 2008 02:10:30 +0000

What a scoop Michael. Award level stuff here. Amazing reporting.

Two big news items here:

1. Series C was not closed? If it was, then there were some loose strings to go back and redo a Series legally. Probably gun to the head of Boardroom level stuff

2. Common stock reduced from 50% to 9%. This is the big news really. New option pool of 30%? Series A/B remain at same level, Series C gets a little more, but the new structure is really kills the employees and founders.

Michael well done,and needs some digging deeper on why.

By: Paid Content : BitTorrent Renegotiates Third Round; Takes $10 Million Less Than Before

Tue, 16 Dec 2008 01:54:13 +0000

[...] BitTorrent crashes and burns? The company raised $17 million in a third round over the summer, but according to TechCrunch, it has returned most of those funds to investors DAG Ventures, DCM and Accel Partners in exchange [...]

By: BitTorrent now worth significantly less money | Idiot Inc.

BitTorrent now worth significantly less money | Idiot Inc. — Tue, 16 Dec 2008 01:47:01 +0000

[...] The Extraordinary Happenings At BitTorrent [TechCrunch] BitTorrent Recapitalizes: $17 M Financing Undone, Valuation Plummets 0 Posted in Company Memos [...]

By: BitTorrent’s Future | News Search Engine - Klodian.net

BitTorrent’s Future | News Search Engine - Klodian.net — Tue, 16 Dec 2008 01:24:47 +0000

[...] a useful service, not to mention I’m a big fan of Bram Cohen. However, both VentureBeat and TechCrunch seem to illustrate that the move has been in the making for months due in part to changes in their [...]

By: The Extraordinary Happenings At BitTorrent

The Extraordinary Happenings At BitTorrent — Mon, 15 Dec 2008 20:56:29 +0000

[...] said a corporate law partner at a large silicon valley law firm. he was referring to the undoing of a $17 million venture round at BitTorrent and subsequent recapitalization that we reported [...]

By: BitTorrent: ‘Take back $17 million, we aren’t worth it!’ | Startup Meme - Technology Startup and Latest Tech News

Mon, 15 Dec 2008 19:39:55 +0000

[...] within the ranks. President and CEO, Eric Klinker said in his letter sent to shareholders stated: last spring the Company was focusing its business efforts on content delivery services (DNA), [...]

By: Monday Morning Tech Roundup | lalawag

Monday Morning Tech Roundup | lalawag — Mon, 15 Dec 2008 17:04:27 +0000

[...] respect in Hollywood, but the grand plan has failed. An investor of the company has leaked that the original financing has been reversed and the money returned. BitTorrent raised a new round for $7 million on a $28 million valuation, [...]

By: chrisco

chrisco — Mon, 15 Dec 2008 16:56:28 +0000

Wow, somebody f-ed up, big time:

Why would you agree to a rescindable deal? Yes, I know, “you had to,” because you’re investors, who probably called themselves your “partners” when they were wooing you, saw your weakness and forced you into the bathroom stall, bent you over, and showed you who they really were.

Why did your lawyer not demand whatever clause let this happen be removed, even if you had to trade something for that to happen? Because they are conflicted too. You can bring them one deal, but the VC can bring them many. Who do they want to please? Right.

Yes, I’m over-simplifying, exaggerating, and possibly mischaracterizing, but this story is yet another lesson for entrepreneurs, yet another reason why you should bootstrap if you can. Otherwise, most of the time, you’re just asking to be taken advantage of.

Sure, sometimes you get some benefit from taking VC money before you have revenue and positive margins, just like sometimes you get some benefit (at least it looks that way for a while) from taking the devil’s money. In the end, though, most of the time, you will get screwed (sometimes justifiably so, maybe, such as if it was your own greed that drove you to the deal). Why? I leave you with my favorite version of a famous fable:

Once upon a time, a woman was picking up firewood. She came upon a poisonous snake frozen in the snow. She took the snake home and nursed it back to health. One day the snake bit her on the cheek. As she lay dying, she asked the snake, “Why have you done this to me?” And the snake answered, “Look, bitch, you knew I was a snake.” -NBK

By: Megabits

Megabits — Mon, 15 Dec 2008 15:37:49 +0000

It’s not a file sharing site, nor is is slow. You’re doing it wrong.

By: Bittorrent reduce su valuación y debe renegociar su última ronda | Denken Über

Mon, 15 Dec 2008 14:39:04 +0000

[...] Aún habiendo anunciado hace casi 8 meses que se cerraba la tercer ronda por u$s17 millones debieron renegociarla y cerrar en u$s7 millones con una valuación total de u$s28 millones…. aún cuando ya recibieron más de u$s50 millones en 3 rondas de inversión y es muy interesante ver como explican esta “reducción en su valuación” a los inversores en una carta confidencial que publica Michael Arrington. [...]

By: BitTorrent: $17 M Financing Undone, Valuation Plummets « Internet Making Money

Mon, 15 Dec 2008 13:32:29 +0000

[...] The full story is here:http://www.techcrunch.com/2008/12/14/bad-times-for-bittorrent-17-m-financing-undone-valuation-plumme… [...]

By: Steve

Steve — Mon, 15 Dec 2008 12:53:22 +0000

I’ll never understand why there’s no possible implementation for Firefox, etc. So Ryan is absolutely right: they have to go in that direction… immediately!

By: Se veía venir, inversores que no pueden hacer frente a sus compromisos Loogic.com

Mon, 15 Dec 2008 12:05:43 +0000

[...] que este caso concreto es mucho más complejo que lo que acabo de comentar, en Techcrunch podéis encontrar la explicación con todo detalle. Pero en el fondo la situación es fácil de [...]

By: Mike

Mike — Mon, 15 Dec 2008 11:59:44 +0000

Sometimes, you have got to pull the plug on an investment, before that there are always hard feelings to overcome. http://www.nichea.info does offer some help.

Hope the BitTorrent continues to provide the usual service, downloading. http://www.youtechno.info

By: kafka

kafka — Mon, 15 Dec 2008 11:40:13 +0000

If we were not living in such a capitalist world, BT and it’s creator would have been rewarded for making this very popular technology.
Go Cohen Go.

By: pat

pat — Mon, 15 Dec 2008 10:11:01 +0000

Their problems may be further compounded by banks getting nervous with their lending.