If you are an angel who invested in a startup that was to go public in 2014, you might get a little impatient. High-risk, high-return investing has lost its sparkle in this environment: the stock market is a mess these days, and you want your money.
Enter recapitalization events, where startups restructure their entire cap table to oust old investors, attract new ones and change the way equity and debt are managed. For investors, it's a killer way to enter a business on more user-friendly terms than normal (read: despair), and a good way to get cash on a startup you're betting on.
For the founders, this is rarely good news, because the investors who leave are not a measure that they will add to the pitch pitch. As one investor said in the background, the impetus for the coronavirus recapitalization events shows "a hella dilution for desperate times".
This is what makes Workhuman's transparency with its recent recapitalization event even more attractive.
Last year, the human resources platform generated $ 580 million in revenue from clients like LinkedIn, Cisco, J&J and other clients. In April, activity increased by 40%. Co-founder and CEO Eric Mosley said the company has grown five times since the company pulled out of its 2014 plans for an IPO. Workhuman has not launched a single round since 2004 (and does not plan to do so soon).
Being conservative has paid off; although Workhuman has been running for almost two decades, Mosley says he thinks the business is still at the "tip of the iceberg." The company recently held a recapitalization event to sell the stakes of its first investors, who cut a check for $ 200,000 more than 20 years ago.
