reuters.com — Digg Inc, the leading news sharing site, has taken a new round of $28.7 million in funding that will allow the company to expand internationally and help it weather tighter economic times for Web businesses.
Sep 24, 2008 View in Crawl 4
smurph0404Sep 24, 2008
How did this work? Did they buy a piece of Digg? Is it a Loan? Did these guys already own Digg?
Closed AccountSep 24, 2008
Series C -- they get preferred stock in Digg, most likely squeezing out the founders by a large chunk. When you have a round with a lower valuation than the previous round, everybody else with preferred stock has their investment adjusted to stay the same, at the expense of the employees/founders. Taking VC money to "weather tighter economic times" is a terrible idea. They'd have been much better off making sure they were profitable.