In a document obtained by TechCrunch, co-founder and CEO Danielle Morrill wrote that “common stockholders will not be receiving anything in this deal.” In other words, Mattermark employee shares are worthless.
It was just last year that Mattermark raised a $7.3 million Series B. Since it was founded in 2012, the business raised over $17 million from high-profile investors like Andreessen Horowitz, NEA, 500 Startups, Foundry Group and Sherpa Capital.
The letter says that “the consideration for the purchase of the company did not clear the preference of preferred shareholders.” This means that the VCs aren’t necessarily getting all their money back, either.
Unfortunately, as Mattermark data will show you, running a startup is tough. We’re told that it was hard to convince people to pay for the intel in a competitive landscape that includes Crunchbase, PitchBook and CB Insights.
Here’s the text from the letter sent to common shareholders.
“Dear Mattermark Common Shareholders,
I’m reaching out to share some great news: Mattermark is being acquired by FullContact! We are happy to have found an exit for our shareholders, and are working hard to close this deal immediately. Your help is kindly requested to keep an eye out for docs in Doscusign so we can get your signature today.
This is a private stock transaction, and unfortunately the consideration for the purchase of the company did not clear the preference of Preferred shareholders so Common stockholders will not be receiving anything in this deal (cash or stock). Though this is not the outcome we all dreamed of when we embarked on this journey nearly 6 years ago, we are super grateful to have worked with you to organize the world’s business information and would appreciate your signature so we can get the majority of common holder signatures needed to close this deal today.”
The source who sent the document said there was also an email that discussed a less than $500,000 cash consideration from FullContact, which “will be used to facilitate shutdown.” The deal additionally included a stock transaction.
We’ve reached out to Mattermark for comment.
Published at Fri, 22 Dec 2017 01:38:08 +0000