Reactions To Foursquare Funding
Below are links to all of the Foursquare related funding news and opinions from today (Thursday, 4/11).
Today Foursquare announced $41M in debt (loans + convertible notes) for their latest round of financing. This is the single most interesting and polarizing tech company out there right now. On one hand, they provide a great product and utility for users. Foursquare’s mobile app is the single best “on the move” discovery app, especially for navigating cities like New York, Austin, and San Francisco.
On the other hand, their business prospects are very much in doubt. Reading between the lines, it seems clear that revenue growth has been disappointing and that there is no clear path to financial success.
So the issue here - great mobile product vs. poor business - bears close scrutiny. The outcome is important - for Dennis and his team, for New York tech, for the SoLoMo app category, and for the financial viability of free mobile apps in general.
As an avid and enthusiastic Foursquare user, I am rooting for Dennis and co. to succeed.
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Here is the announcement by Dennis Crowley on the Foursquare blog.
Sarah Frier of Bloomberg has a great breakdown of what the funding means for both Foursquare and the Investors.
Participants in this round, including Albert Wegner and Fred Wilson from USV, and Bijan Sabet from Spark, weigh in too. Part of me sees this unusual funding transparency as pre-emptive PR; this is clearly a delicate situation, and it seems the VCs are trying to get out in front of it to dispel rumors and negative press.
John Lilly remains bullish on Foursquare both as a product and a business, and he has no (financial) dog in this fight.
I highly suggest reading the back and forth between Mike Dudas, Rakesh Agrawal, and Om Malik. Rakesh is and has been extremely pessimistic about Foursquare’s business prospects, while Om is still a believer. Although I hope Rakesh is wrong, it is hard to argue with his points.
Om follows up with a thoughtful piece entitled Dennis Crowley and the cycle of second guessing - and graciously links back to my updates page.
Peter Kafka of AllThingsD has an exclusive interview with Dennis Crowley regarding the fundraise, the structure of the deal, and the strategy going forward.
Ricardo Bilton explores the disconnect between “great app” and “poor business” in his piece on VentureBeat.
I will add more links as they come in...