Lightspeed and Ning: It's Complicated
Over the weekend, TechCrunch's Michael Arrington suggested that Lightspeed’s new $15 million investment in Ning -- whose online platform invites people to create their own social networks -- boils down to one word: Marketing. Lightspeed needed a sexy social networking startup to add to its portfolio, he wrote, adding: “Do they expect to see a big return on the investment? Almost certainly not. But they also haven’t put their money at extreme risk. They likely have a liquidation preference that lets them get their $15 million out of the company before others can take part of the pie. So effectively, they just bought themselves a bunch of marketing with their limited partners’ money…LPs don’t really mind.”
28 July 2009•3 mins read
