This Week in Startups Sequoia resigns from Citizen's board, IPO window opens, chaos at Dapper Labs | E1691
Mar 7, 2023
Sequoia's recent exit from Citizen's board raises eyebrows over investment ethics and the upcoming IPO market. With Instacart and ARM preparing to go public, the conversation turns to the dynamics of startup funding. Meanwhile, chaos brews at Dapper Labs as it faces financial scrutiny and legal challenges, shedding light on corporate spending in turbulent times. The podcast also navigates the implications of digital advertising and the urgent need for domestic semiconductor manufacturing amidst geopolitical tensions.
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Sequoia and Citizen
- Sequoia Capital left Citizen's board after declining a "pay-to-play" round.
- This followed Citizen's inability to achieve product-market fit and overspending.
Cram-Down Rounds
- Cram-down rounds, like the one Citizen faced, create tension between investors and founders.
- These rounds revalue the company lower, forcing existing investors to invest more or lose equity.
VCs and Founders Responsibilities
- VCs should prioritize their LPs' best interests when making investment decisions.
- Founders are responsible for running their companies effectively and avoiding financial distress.