<story><title>LivingSocial Is Laying Off More Than 50 Percent of Its Staff</title><url>http://recode.net/2016/03/16/livingsocial-is-laying-off-more-than-50-percent-of-its-staff/</url></story><parent_chain></parent_chain><comment><author>jedberg</author><text>&amp;quot;The company has raised more than $900 million to date from Amazon, J.P. Morgan and Lightspeed Venture Partners.&amp;quot;&lt;p&gt;That&amp;#x27;s the biggest red flag for me.  General rule of thumb is that your VCs won&amp;#x27;t approve an exit unless it&amp;#x27;s for at least 10x the funding you&amp;#x27;ve taken, which means they need a minimum exit of about 10 billion.&lt;p&gt;That&amp;#x27;s a tough spot to be in, and really changes your thinking.  I know of at least one company that had an exit opportunity but it was only 2x funding, so the investors wouldn&amp;#x27;t allow it.  They then slogged along for &lt;i&gt;8 more years&lt;/i&gt; until they finally had an exit that was 0.2x and it all went to the series A investors with their preference.  Founders got nothing, angels got nothing, employees got nothing, and series B and beyond (the ones who blocked the 2x exit) got nothing.&lt;p&gt;Edit to clarify:  I&amp;#x27;m not saying the VCs are doing anything wrong here or being irrational or anything like that.  I&amp;#x27;m saying as a founder you need to watch out for this because the VC has a diversified portfolio and the founder doesn&amp;#x27;t.</text></comment>
<story><title>LivingSocial Is Laying Off More Than 50 Percent of Its Staff</title><url>http://recode.net/2016/03/16/livingsocial-is-laying-off-more-than-50-percent-of-its-staff/</url></story><parent_chain></parent_chain><comment><author>ahallock</author><text>I&amp;#x27;m surprised these sites are still around. To me, offering your services at 50% off screams desperation or that your business is going under. I bought a deal once from Groupon and couldn&amp;#x27;t even bring myself to use it at the restaurant. It was a high-end establishment and the thought of pulling out the crumpled paper voucher, which I printed when the ink cartridge levels were low, cheapened the whole experience.</text></comment>