/// VCs Unite! Chamath Palihapitiya Decries Airbnb’s Recent $112M Funding for Founder Control and Cashout

October 1, 2011  |  All Things Digital


Here’s some electric weekend reading for those interested in the push-and-pull between venture investors and start-ups in the frothy Web 2.0 environment. In an email embedded below to Airbnb CEO and co-founder Brian Chesky, which I obtained, former Facebook exec Chamath Palihapitiya, who now runs an investment fund called the Social+Capital Partnership, is passing on participating in the recent $112 million round for the hot online rental site that was announced in July. The deal has not officially closed yet, which values the company at $1.2 billion , but includes venture firms such as DST Global, Andreessen Horowitz and others. Previous investors include Sequoia Capital. Palihapitiya confirmed to me that it was his email and that his possible investment in Airbnb was small. That said, his concerns center on how much voting control of new investors’ preferred shares the founders have in the latest round and also a $22.5 million cashing out, $21 million of which is going to those founders. Another $9.6 million is being used to buy secondary stock from current Airbnb shareholders, who have to render parts of their vested stakes for the money. Such wrangling between investors and entrepreneurs is not uncommon in Silicon Valley these days, as ever dumber money chases ever more powerful geeks.

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VCs Unite! Chamath Palihapitiya Decries Airbnb’s Recent $112M Funding for Founder Control and Cashout


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