Groupon’s IPO news has the media hounding for information. Fortune dug into the past of its chairman, Eric Lefkofsky, and found some concerning details.
The article starts with a quote from Lefkofsky back in the early 2000s when he was running Starbelly. Starbelly was a promotional apparel company that sold to Ha-Lo industries for $240 million.
“Lets start having fun… lets get funky… let’s announce everything… let’s be WILDLY positive in our forecasts… lets take this thing to the extreme… if we get wacked [sic] on the ride down-who gives a shit… THE TIME TO GET RADICAL IS NOW… WE HAVE NOTHING TO LOSE…”
Shortly after the deal, Ha-Lo declared bankruptcy and shareholders blamed Starbelly. Lawsuits followed.These weren’t the first or last of the lawsuits that “checker” Lefkofsky’s past.
“Lefkofsky’s track record, reflecting failures and successes, bears certain hallmarks: rapid revenue growth accompanied by big losses, a penchant to sell stock early on, and lawsuits filed by investors, lenders or customers who feel they have been wronged,” he writes.
He continues: “Lefkofsky summarizes his credo as “you might as well fail fast.” And, apparently, cash out fast. That ethic may be fine in the world of private equity, where investors usually have enough net worth and sophistication to stomach such risk. But it’s another matter entirely in the public markets, where middle class investors can be seduced by the allure of a hot tech IPO.”
For the full article and more details about Lefkofsky’s past, head over to Fortune >>
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