If you’re an angel who bought a start-up that was meant to go public in 2014, you might be getting a little bit impatient. High-risk, high-reward investing has actually lost its shine in this environment: the stock market is a mess these days, and you desire your cash
back. Go into recapitalization events, where start-ups reorganize their whole cap table to eject old investors, induce new ones and move the way equity and debt is handled. For financiers, it’s a killer way to get in a business on friendlier terms than normal (read: desperation), and a great method to get liquidity on a start-up you’re betting on.
For founders, it’s hardly ever great news, as leaving financiers is not a metric they’re going to contribute to the pitch deck. As one investor said on background, the spur of coronavirus-related recapitalization events reveals “hella dilution for desperate times.”
That’s what makes Workhuman‘s openness with its current recapitalization event all the more enticing.
In 2015, the human-resources platform brought in $580 million in income from consumers like LinkedIn, Cisco, J&J and other clients. In April, company grew 40%. Co-founder and CEO Eric Mosley says service has grown 5 times in size considering that the business drew back from its 2014 strategies to IPO. Workhuman hasn’t raised a single venture round because 2004 (and doesn’t plan to any time quickly).
Being conservative has paid off; although Workhuman has operated for nearly two decades, Mosley says he believes the company is still at the” suggestion of the iceberg. “The business just recently had a recapitalization event to offer the stakes of its earliest financiers, who cut a$200,000 check more than 20 years ago. Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.