Grubhub disclosed in a regulatory filing Thursday that it’s facing 14 lawsuits from investors who say the company misled them about its plans to be acquired by Dutch food delivery giant Just Eat Takeaway.
The investors alleged that Grubhub executives and board members failed to disclose key financial details and massive payouts that they stood to receive as part of the merger, and that they failed to secure the highest possible price for Grubhub’s public shareholders, harming them financially as a result.
Frank Ferreiro, the lead plaintiff in the case, said in a lawsuit filed in New York last month that when Grubhub publicly announced the proposed merger, it withheld underlying financial data it had used to make assumptions about the companies’ future performance, as well as well as “golden parachutes,” job offers, and other lucrative perks guaranteed to Grubhub executives and directors.
Ferreiro’s lawsuit alleged that investors like himself – who would get roughly 0.67 share of Just Eat stock for each of their Grubhub shares regardless of either company’s stock price when the merger closes – lack the information to determine whether they’re getting a raw deal.
“Grubhub insiders are the primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders,” the lawsuit stated.
Ferrerio also said that GrubHub didn’t try hard enough to get the best deal for public investors.
His lawsuit asks the court to invalidate the proposed merger agreement and force Grubhub to seek the “highest possible price” for any sale.
Chamath Palihapitiya once blasted an older man for challenging the billionaire’s track record and projections for his first blank-check company deal, Virgin Galactic, according to a report published Monday by The New Yorker.
While he was pitching the company’s prospects to investors in 2019, the Social Capital CEO met a bunch of mutual-fund managers in New York. He delivered an impressive speech about helping mankind reach the stars with the spaceflight company, and underlined how it could change the world.
Chamath is the chairman of Virgin Galactic. He failed to include that millions had gone up in smoke for the company after it spent heavily to ready its spaceships, and that it had missed every self-imposed deadline in its 15-year history, the New Yorker’s Charles Duhigg wrote.
A conservatively-dressed older attendee present in the audience cut into the billionaire’s speech, questioning his proclamations, the report said. After allowing him to sound off for a while, Palihapitiya retorted with: “You’re a complete f—ing idiot.”
Astonished, the older gentleman had no response as the “SPAC King” laid into him. “Have you even looked at the prospectus? Did you even f—ing Google me before you came in here?”
More wide-eyed attendees were waiting in silence to see how the situation would end. “How lazy are you?” Palihapitiya said. “I don’t even want your f—ing money.”
But soon after, his remarks were met with laughter as everyone aged under 50 began smiling broadly. “It was brilliant,” one attendee told the New Yorker. “It was completely calculated. That old guy wasn’t ever gonna invest in space tourism. But the other people in the room – they loved it!”
About 50% of the group called the billionaire’s office later to declare they wanted to support the Virgin Galactic investment, the report said.
“People either love Chamath or they hate him, and that’s fantastic, because polarization gets attention,” the attendee was reported saying. “Polarization gets you on CNBC, it gets you Twitter followers, it gets you a megaphone. If you believe that Chamath can get an hour on CNBC to explain Virgin Galactic, then you want to buy into this deal, because attention is money.”
He and his business partner Ian Osborne indirectly own millions of shares in the space-tourism company via their investment vehicle, SCH Sponsor Corp.
Social Capital didn’t immediately respond on behalf of its CEO Chamath Palihapitiya to Insider’s request for comment.
Entrepreneurs already understand that getting media attention helps with user acquisition, customer traction, making a mark in the space where you play, and attracting investors. If an angel or VC sees that you’re already getting getting press mentions, they’ll be more likely to think you’re in demand, because reporters are true trend hunters and understand what consumers want in an intuitive way.
This is the obvious benefit of talking to media: It’s social proof. Sure, investors want to be able to say that they were responsible for discovering the next great startup founder, and so you may think getting press would work against that perspective. But highlighting media attention up front on your deck shows VCs and angels that you have been already vetted by influencers and trendsetters. If a journalist is interested enough in your story and product to want to write about you – particularly an influential one – you’re already way ahead of the game.
But there’s another secret benefit you get when you talk to media, and entrepreneurs often find out accidentally, when they’re in the middle of fundraising.
It’s the fact that when you start finding the angles that work with reporters – those pitches that actually get them to respond to your email, and to write articles about you – you are actually learning how to talk about your product with your target audience and also to investors, who need to know your value up front.
Here’s how pitching to media will help you pitch to investors.
You’ll find your narrative arc
An arc is the sequence of events in a plot, with peaks and plateaus in the narrative. A PR campaign is really just a fight to figure out what arc works for your audience. It’s almost like finding the missing puzzle piece – what’s the one angle that writers will love?
For example, let’s say you are trying to get press for your beauty brand. If you find out that editors are responding really well to the story that is all about one particular ingredient that no one else uses in their formulations, you know that’s a winning strategy, so you expand that storyline as far as you can take it. Or you realize that your founder storyline is getting the most attention – so you want to use that narrative to death.
Understanding what narrative arcs or storylines work best with media – the ones that have them beating down your door – should be an aha moment for you, because this is also the angle that investors will be drawn to. If you can take your VC’s and angel investors through that same narrative arc, they’ll connect the dots more quickly and have the same aha moment themselves. Painting this picture is very important.
You’ll learn more about your competition
Investors like to say that when a founder says they have no competition, that’s a giant red flag. That’s because there’s always a competitor not too far behind – or at least someone who is doing something similar. But the flip side is that if there truly is no competition, it means that there is likely no market for your product. If no one is solving the problem you’re solving, then how do you know it’s an important problem to solve? Overall, a founder should find at least some form of competition to talk about in their pitch to investors.
There are two ways that getting media will help you understand your competition. For one, the more you dig around the web for information about how to pitch your brand to press, the more you’ll find articles about competitor’s stories. You’ll learn how reporters are talking about them – what they’re highlighting, what talking points they may have crafted, and what stories are most important to them.
Second, when reporters ask you the hard questions about your competition, you’ll have to dig deep and come up with thoughtful answers – how do you truly differ from them? You’ll come out of these interviews with a better idea of who your competition is, how to differentiate yourself from them – and most importantly, how to talk about this with investors. Because, trust me, investors will ask you about competitors. Make sure you don’t say the wrong thing.
You’ll stress test your central thesis
Reporters will at some point in your career start asking you tough questions, not because they want to see you squirm, but because they want to write a really great story that their readers will love. There’s nothing wrong with that. As a result, they will likely be the first person to see gaps in the central thesis of your value proposition. They are on the outside looking in – whereas you’re on the inside, and have been living and breathing and creating your product for many months, maybe even years. Reporters and bloggers will see things you don’t.
The beauty of this is that the questions they’ll ask will likely be the questions an investor will ask you during an email exchange, a Q&A or an actual pitch. Even better, if you proactively answer these hard questions in your deck or pitch you will stand head and shoulders above other founders. The VC will see you as someone who is extremely thoughtful around the market and the problem you are trying to solve.
You’ll stress test yourself
There is nothing more nail biting than talking to media for the first time. That first interview is challenging because you don’t know what to expect, what questions will be asked, or the kind of impression you will make on the reporter. When you are thrown into the Zoom or Skype call, you’ll have to think quickly on your feet and know how to respond to difficult questions, as well as how to create good rapport with the person you are speaking with. When you have several interviews under your belt, you’ll feel more comfortable meeting with investors and answering questions succinctly and effectively.
There are the obvious benefits to sharing your story with media but there are also those that will make your investor pitch stronger, more thoughtful, and more effective. Treat it like a crash course on learning how to talk to angel investors and VC’s, and show them your value.
Cryptocurrency holders are more likely to be dog-friendly, while those who lean on gold tend to be fans of cats, according to research by crypto exchange Xcoins.
As many as 45% of gold investors were found more likely to own a cat, and about 44% of crypto investors had a tendency to have dogs, data showed.
Another notable highlight of the research is that only 28% of people that hold crypto are women, confirming the wide belief that the industry is male-dominated – with 72% of them being men. Meanwhile, gold investors are almost evenly split between men and women.
Data published by eEtoro last month showed only 15% of bitcoin traders are women. Although that’s a slight increase from the beginning of 2020, it still highlights the massive gender imbalance in the cryptocurrency world.
Xcoins’ CEO said it was important to bridge the gap between gender groups to facilitate mainstream adoption. “If bitcoin is to succeed in the mainstream, then it needs support from all demographics,” CEO Rob Frye said. “No-one is stopping women from entering, or investing the crypto space, but little is being done to encourage them either.”
Xcoins’ study also found that younger people aged between 16 and 34 are more likely to invest in cryptocurrencies, while those inclined towards gold are older than 34. This highlighted differences in investors’ marital status, showing gold investors are more likely to be married with children, while crypto investors tend to be single with no children.
Former Tesla board member Steve Westly said the company is facing off against a lot of competition from other automakers that have dived into the electric-car market.
“Tesla is not going to be king of the hill in electric forever,” Westly told CNBC on Tuesday.
Westly was an early Tesla investor and has often been bullish on the company’s prospects, but said the electric carmaker will need to “double down” in order to fend off competition.
In particular, the former board member referenced recent electric-vehicle efforts from major automotive companies, including General Motors and Volkswagen.
“They’re getting competition from all sectors,” Westly said, citing electric cars from luxury brands like Audi and Porsche, as well as less expensive vehicles from companies like Nio and Li Auto in China.
“One could argue this indicates that, while Tesla’s appeal is clearly formidable, it’s not absolute and could be displaced by a worthy alternative,” said Stewart Stropp, senior director of automotive retail, in J.D. Power’s press release.
Some investors see Tesla’s over $700 billion market value as overinflated. “Big Short” investor Michael Burry revealed he was short Tesla in December and called its stock price “ridiculous.”
Tesla has long been working to compete with more affordable electric cars, as well as the Chinese market. Tesla plans to design a $25,000 car and has expanded its manufacturing plants into China’s lucrative EV market, building a Shanghai Gigafactory.
Years ago, I came across a designer named Michelle who was incredibly in demand within her company. People would fight to have her on their team. I later discovered that while people liked Michelle’s creativity, they loved her process even more.
After sharing a set of design options, Michelle always gathered input from the room. Then, in a follow-up meeting, she would go down the checklist of feedback, item by item, and show how she had incorporated their thoughts into the newest design. Or, if she had decided not to use the feedback, she would share her reasons why. People didn’t always agree with Michelle, but they always felt heard. Their input mattered, and they felt like insiders in her process.
Recently, June Cohen said something that really made Michelle’s story click. Cohen, the former head of media for TED and current CEO of WaitWhat, explained that in order to chart a truly epic career, “You need to make everyone you enlist a hero, not just in your story, but in their own.” In the “Wizard of Oz,” Dorothy enlists the help of the Tin Man, the Scarecrow, and the Lion – by making them the hero of their own stories. Cohen says, “If the Scarecrow didn’t have a chance of getting a brain, if the Tin Man couldn’t get a heart – they wouldn’t have braved those attacks from flying monkeys!”
To feel like heroes, we need to know that what we said and what we did made an impact. Penelope Burk is a renowned fundraising researcher who showed the difference it makes when we truly feel that way. More than twenty years ago, Burk noticed that nonprofit leaders were spending the majority of their time and resources recruiting new donors instead of keeping the ones they already had. As a result, nearly 70% of an average charity’s backers would never give again, and nonprofit leaders would constantly be rebuilding their donor bases from scratch.
“It didn’t make any sense,” Burk told me. So she decided to study what would happen if a charity spent real time and effort cultivating existing donor relationships. In her experiment, Burk isolated a set of people who had given to a national health charity.
If you were a part of this test group, you received a personal phone call from a member of the board of directors. During this call, you were not asked for more money. This was a critical point – the call wasn’t being used to sell you again, but rather to express sincere gratitude. You received a heartfelt thank you for your support, and you learned how your contribution was making a difference. After those phone calls were placed, Burk waited to see which donors stuck around.
What she found was astounding. Two years later, 70% of the people who had received the phone call from a board member were still giving to the organization, compared to just 18% of those who hadn’t. To top it off, donors who remained were now giving 42% more than they had at the start.
When Burk shared those results with me, I asked her how one simple phone call could make such a huge difference. She answered my question, in part, by reading a thank-you letter she happened to have sitting on her desk. It was written from one community organizer to another, and the first paragraph began: “We know it’s often your role to do the work of making donors and volunteers feel like heroes . . . and they no doubt are.”
Helping people understand their impact isn’t a business concept, it’s a human concept. We all want to feel as though what we said and what we did mattered. If you’re a backer, that can be as simple as knowing your input was heard and utilized – whether that’s for a mission, a strategy, or a product.
I got my first glimpse of this in politics. In high school, I knocked on doors for a local politician named John Dingell, and I still remember the annoyed looks on people’s faces when I’d ring their doorbell on a Sunday afternoon. By the tail end of the campaign, people’s irritation grew because their homes had been visited multiple times by campaign workers who had handed them the same piece of literature. “If you give me one more of these pamphlets, I’m voting for the other guy,” said one suburban dad.
A decade later, when I was canvassing for another candidate, smartphones had changed everything. Before knocking on a door, I could pull up an app and know the issues that mattered most to that voter because we had taken notes the last time we visited the home. I would say something like “From the last time we chatted, I know you care deeply about K-through-12 education. Can I give you an update on some of the progress we’re making on that front?” As a result, there were fewer door slams and more quality conversations. Voters felt like they were being listened to – that what they said mattered.
We don’t typically win people over in one conversation, but through a series of interactions that builds trust and confidence. Even if the last conversation went poorly, you can use the next one to show them how they influenced your work. This type of follow-up is so powerful that it can often change a backer’s response from no to yes.
Brian Wood is an innovation strategist at the National Geospatial-Intelligence Agency, which is part of the US Department of Defense. He explained to me, in layman’s terms, an internal project he created called Conduit, which used artificial intelligence to help the agency make better decisions more efficiently. But when he pitched decision makers at the Pentagon, they rejected the idea, expressing a laundry list of concerns.
Instead of getting defensive, Wood listened carefully to the feedback. He took detailed notes and created a checklist of things he’d need to address before he returned. Then, weeks later, he scheduled a follow-up meeting.
Just as Michelle the designer had done at a high-tech company, Wood walked Pentagon officials through a modified version of his prototype, showing them exactly how their feedback had been incorporated. When Wood finished his demo, he saw a room full of surprised faces. When he asked if everything was okay, one of the officers cleared his throat and said, “Everything’s fine. It’s just . . . no one ever comes back.”
Unlike Wood, I never thought to go back to the investors who said no to Rise. That is, until I met an old friend from law school for coffee. Andy patiently listened to me complain about how everyone was passing on my idea. When I was finished, he leaned back in his chair a bit and looked off into the distance for a moment. Then he asked a one-word question: “Why?”
“Why what?” I asked.
“Why did they pass?” he said.
“Because they didn’t like the idea,” I said, feeling a slight irritation.
“Yes, but why? Why didn’t they like the idea?” he pressed.
At that moment, it occurred to me that I hadn’t really asked investors who passed why they had passed. Typically, I had received a short email saying something like “Sorry. It’s just not the right fit for us.” But I hadn’t followed up and probed further into why.
Later that day, I took Andy’s advice and reached out to all the investors who had passed on Rise and asked them what it would have taken for them to say yes. A few of them responded with their version of “Nothing. Just not the right fit for us.” But others responded with substantive notes, offering feedback such as “We would have liked to have seen more numbers around retention” or “We’d like to see the engineering team built out a little more so we know you can build a strong consumer product.”
Without asking the question, I never would have received the feedback. And now that I had a clear direction, I knew how to adjust our road map to focus on customer retention and engage a recruiter to help us find engineering talent. About a month later, I emailed those same investors and asked if they’d be willing to take a quick follow-up meeting. I began each of those meetings by restating the concerns they shared and, as soon as that happened, I could feel the room relax. They knew in that moment that I wasn’t going to waste their time regurgitating the exact same pitch.
Then, like Brian Wood inside the Pentagon and Michelle inside her design room, I showed how I had modified our approach using their input and the results we had so far. The new pitch didn’t always work, but two venture capitalists who had previously told me no became early investors in Rise.
Suneel Gupta is the cofounder of Rise and teaches Innovation on faculty at Harvard University. Using the 7 steps inside this book, Suneel went from being the face of failure for the New York Times to being the “New Face of Innovation” for the New York Stock Exchange. His ideas have been backed by firms like Greylock and Google Ventures, and he has invested in startups including Airbnb, Calm, and SpaceX.