Responding to claims from financial research firm PrivCo that its latest funding was a “last-ditch attempt” to save the company from “imminent financial ruin,” LivingSocial has gone on the offensive, claiming the report contained “significant inaccuracies and errors” In a memo to employees, published by Fortune, CEO Tim O’Shaughnessy refuted nearly all of PrivCo’s claims. “This was not an emergency round,” wrote O’Shaughnessy. “We received our first term sheet on December 23rd, nearly two months ago, and this has been an organized, thought-out process. This was an equity round, not a debt infusion.” He said investors bought 7.5% of the company for $110 million in what he admitted was a “down round.” He also went on to label quotes from a “senior LivingSocial communication executive” as “straight up fiction.” Fortune also reported that previous backers Amazon and Revolution took part in the latest round, which according to LivingSocial’s charter filing in Delaware “clearly” came in the form of equity — not debt. Read more.
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