The vice chairman of Groupon’s board, Ted Leonsis, is also a partner at Revolution, Steve Case’s investment firm, which is a big investor in Groupon’s biggest rival LivingSocial, Bloomberg reports.That’s an obvious potential conflict of interest.
There probably isn’t much there to be worried about: Leonsis, who owns Groupon shares, has no financial interest in LivingSocial, because he’s a partner in a different fund managed by the firm. Revolution made the LivingSocial investment before he joined the firm. The technology world is close-knit, and a lot of people are often one or two degrees away from competitors.
That being said, it was also an easily avoidable conflict, both for Leonsis and for Groupon. Leonsis has an impressive resume: he owns two sports teams, he produced films, he was a top executive at AOL and a board member at American Express, but we’re sure they could have found someone equally impressive for their board without the conflict. And Leonsis could have foreseen this was coming and turned them down.
The conflict is more of a distraction than anything, but it’s something potential shareholders ought to know as Groupon prepares to go public, and it’s a bit surprising it was allowed to happen.
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