Prestige Names as Fundraising Stampede

“breakfast and discussed the strategy for the next three days. Unlike our first funding round, there would be no opportunity for detailed due diligence. Investors would be asked to state how much they * wanted to invest purely on the basis of our business plan and the impressive names that were already backing us. The underlying assumption — important to encourage — was that this round would be oversubscribed, and that investors would receive their reduced allocations according to the size of their bids. The incentive, therefore, was to bid high.”

“investment. Over the next few days more offers came in from existing shareholders, including Bernard Amault of LVMH and 21Investimenti. The fact that we hadn’t increased our valuation was obviously seen as an opportunity too good to be missed regardless of our launch problems. It was a chance for investors to buy more shares, at the same cost, rather than having to pay a higher price as they would have expected in a new funding round. When all the offers were counted, they added up to $23 million — much more than we needed. In the allocation of shares that followed, Nader as our newest investor was scaled down to $4 million. I hoped he wouldn’t mind too much.”