Peter Kafka

Recent Posts by Peter Kafka

Where Did Groupon’s Billion Dollars Go?

In January, Groupon raised $950 million. By the end of March, it had $209 million in cash.

What happened to all that money?

The company’s IPO filing spells that out: Almost all of it went right back out the door, to employees and early investors.

The details: Groupon raised a total of $946 million in two funding rounds last winter. It kept $136 million of it help run the money-losing company. The remaining $810 million was paid out, via stock purchases, to CEO Andrew Mason and some of his backers, including Eric Lefkofsky, and, notably, the Samwer brothers, who sold their CityDeal company to Groupon in 2010.

Here’s how the stock sales broke down:

And here are the footnotes you’ll need to interpret the chart:

  1. The manager of 600 West Partners II, LLC is Blue Media, LLC, an entity owned by Eric P. Lefkofsky (50 percent) and his wife, Elizabeth Kramer Lefkofsky (50 percent).
  2. Green Media, LLC is owned by Eric P. Lefkofsky (50%) and his wife, Elizabeth Kramer Lefkofsky (50 percent).
  3. Mr. Walter is one of our former directors.
  4. Rugger Ventures LLC is owned by Kimberly Kewell (80 percent), the wife of Bradley A. Keywell, and Mr. Keywell’s children (20 percent).
  5. Mr. Pelletier is our former Chief Technology Officer.
  6. Mr. Fried is one of our former directors.

Of note: This wasn’t the first time Groupon had raised money and taken cash off the table. In April 2010, the company raised $130 million, and handed $120 million to many of the same people.

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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus