Depends on the health issues. In the US, northeast and Florida at least there are many free courts almost everywhere. And plenty of older folks with small or medium health issues still find the time and motivation to play.
the reason G/O failed was due to leadership. Full Stop.
the audience that was assembled was actually impressive and the PE money was used correctly to build an interesting portfolio of sites.
From there it was an operational disaster. All the important sites they had have been acquired by better run companies which confirms that the underlying assets were pretty good, they just needed to be run by someone else.
On good authority here's a good example: They have one of the top car blogs in the world, and had zero dedicated auto ad sellers. Anyone who knows auto in advertising knows you need people in LA and Detroit full time on the agencies and OEMs.
Having invested in 150+ startups myself, I can tell you that it definitely is for me. I would certainly put more of my money into other investments without QSBS.
Nothing about that article surprises me regarding G/O but there is one point that Zach makes about his transaction that he is wrong about:
"Thanks to G/O's stubborn insistence that it only wanted Quartz's assets and not the corporate entity"...
this is not stubborn it's quite common and is absolutely the right thing to do for many companies interested in another business. If they buy your entity (stock transaction) it comes with all the legal liability.
Zach probably doesn't understand how much more likely his deal was to close as an asset purchase rather than a stock purchase. A stock purchase comes with lots more diligence and legalese. If they are buying your stock they are buying all your baggage and potential legal matters, it requires a lot more work including a laundry list of representations by the seller. G/O did everyone a favor by sticking to an asset purchase and getting the deal done. that's where the positives end it seems.
> If they buy your entity (stock transaction) it comes with all the legal liability
For dying companies, most of the time it's fraudulent and illegal to create a transaction divesting the good assets from the bad debts. Why is that potential problem not an issue for a proposal to sell off everything good and leave behind an insolvent shell?
That's not how these things work. When a company sells an asset the funds go back to the company that sold that asset. So if the "seller" has debts or other obligations those still remain and proceeds from the sale would go towards satisfying those. However, in this case it sounds like the deal was largerly about the employee costs + some cash to the sellers.
I mean, this is literally what an Assignment for the Benefit of Creditors (ABC) acquisition is (or an Article 9) and the specific goal of an ABC is to allow for some semblance of the company's assets to persist unencumbered by an acquirer and without creditors having any further rights to their debts, aside from what they can claim from the proceeds of the ABC.
It's an alternative to bankruptcy that allows for the continued functioning of the business in many cases, and it absolutely leaves behind an insolvent shell. (And acquirers will go through great pains to avoid incurring "successor liability.")
I'm not sure you answered the question here though, why should that sort of transaction be legal? Is there a compelling public interest in allowing this sort of transaction?
It's a pretty common way for companies to go through bankruptcy. If the courts can identify a viable business inside the company, where the main problem is debt that it can't feasibly pay, they will allow it to proceed with business while cancelling the debt. Since the alternative is having the whole thing go under, without much chance of creditors being made whole, there is a benefit to society: some of the people keep their jobs.
He also states the corporate entity was quite valuable for complicated accounting reasons. I take that to mean he was not paid for the quite valuable thing since it wasn't transferred. After the money and assets were transferred, I take it that he eventually realized that a corporate entity has no actual value by itself, the buyout price can be anything and could have included the value of the corporate entity if he wanted, even if it wasn't transferred, and that statement was just a trick to pay him less money.
I took it to mean that the corporate entity had some favourable tax treatment (perhaps from losses in previous years, which could offset against future profits). Which indeed means the corporate entity has no value by itself, but it has some value if you can turn it back into a functioning business.
G/O either had their own tax shelters that meant they wouldn't benefit additionally from the favourable tax treatment, and/or didn't want to take the risk of assuming unknown liabilities (which Zach Seward could have known didn't exist, but would have required more DD from G/O to rule out).
I love the way he's thinking about this. I think the subscription estimates are a little optimistic and the payroll is too high but overall it makes sense.
I've had to report on users for previous media companies I have run. Using a daily number will make the overall number seem higher than the monthly total unique users.
Here is an example of one site I ran a long time ago to illustrate:
Average daily unique users: 111,000
Total unique monthly users for the same period: 2MM unique users.
I could see how the interpretation of the average daily might have someone inferring it's x 30 for a month so call it 3.3MM users during the month but the actual monthly total is lower.
I don't think there is anything wrong with reporting daily especially if it's the type of site or app where the user is likely to be there on a daily basis vs say the websites of the past two decades where half the readers only come once and the other half come 2 -10+ times.
I don’t think this is accurate. It’s usually not the company directly raising on AL. Rather it tends to be a syndicate with partners who have a connection with the company that is raising.
There are various reasons why a hot company might still have a syndicate including the syndicate lead was an early investor in the company so the founder is giving them an allocation in the subsequent rounds.
