
Snapchat Raises $50 Million In Series C From A Single, Undisclosed Investor - tomashertus
http://techcrunch.com/2013/12/11/snapchat-series-c-50-million/
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LearnAndBurn
Prior to using Snapchat, I truly wondered what the big deal was. Why is the
valuation so high, and what value proposition does it offer? I'm certainly not
an expert in the matter, but perhaps my observations can relay some insight to
others who just can't seem to grasp it.

Snapchat is a tool that primarily allows a user to become closer to (1)
acquaintances, and (2) existing friends who may have drifted away over time.
Let's rephrase this a few ways to unveil the value. Snapchat is a
communication tool that's useful for overcoming shyness. Snapchat allows users
to break the ice, facilitate conversation, and overcome awkwardness. Snapchat
allows the user to converse with acquaintances and distant friends that would
otherwise be too awkward via other methods like texting, email, Facebook, etc.

In fewer words, Snapchat makes communication trivial.

Just Snap a picture of something, add some silly text or a drawing on top, and
push it out to everyone. After all, what's the harm? The picture goes away,
and if no one Snaps back it doesn't really matter. There's no evidence of a
failed attempted communication, e.g., an un-responded email, text without a
reply, comment on a wall without a Like or a response. In this way,
Snapchatting is a lot like fishing. Cast your snaps, see which old friends or
acquaintances reply, and strike a conversation, hang out, hookup, etc. later
on.

The disposable aspect of Snapchat provides a new medium for conversation
starting. You know what conversation leads to? Deeper friendships. And who's
really interested in knowing who your friends are? If you aren't making "new
friends" on Facebook, but elsewhere, you can see why Facebook might be
startled. But that fear starts to compound when you consider aging
relationships are being nurtured on Snapchat as well.

After all, if you aren't reconnecting with your current friends on Facebook,
what good is it? All that's left is the News Feed and what everyone is up to.
Hm. Enter Snapchat's "My Story" feature, where you can essentially create a
24-hour lasting Snap, very similar to status updates on Facebook. Interesting.

I'm not sure Facebook being cool or uncool has much to do with it. I suggest
the bigger factor is being able to communicate with peers, despite shyness.
Overcoming awkwardness, facilitating conversation with a lack of confidence,
or whatever you want to call it... Snapchat is a layer below Facebook. Said
another way, turning acquaintances into friends (Snapchat) pre-empts the need
for maintaining friendships (Facebook).

~~~
angryasian
Or its just primarily used for sexting.

~~~
carbocation
Although it would be unethical for the Snapchat folks to do a statistical
sample to find out, I'd estimate that sexting is no more than 1% of Snapchat,
probably more like 0.1% or 0.01%.

~~~
recuter
I beg to differ: [http://youtu.be/FarGT40V8tc](http://youtu.be/FarGT40V8tc)

~~~
haukilup
This seems like the type of video I'd expect in a response on Reddit. That is,
it's a response that's trying to be funny (or link something funny) rather
than continue the conversation at hand.

I was really hoping it would be a link providing evidence to one side
(Snapchat is primarily sexting) or the other side (only a small % of snapchat
usage is sexting).

~~~
recuter
The joke can't exist in a cultural vacuum. It has a lot of views and resonates
with people because sexting on Snapchat is A Thing.

You can't really have much more than anecdotal evidence at this point, so I
offered this.

~~~
lotso
Having cybersex on Skype is a thing, but you people just don't say Skype is
used for cybersex.

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tonywebster
So is Snapchat just big enough and hot enough that investors will ignore due
diligence red flags? In any other startup, I feel like a year of litigation
over an founder's equity stake would send investors running. If you haven't
seen the Snapchat deposition video leak on Business Insider, it's well worth a
look.

~~~
accountoftheday
One perspective is that a friend got screwed out of shares. Another view is
the real drivers behind the company were smart to not give a dispensable
person a third of the company, and are seeking a discount on mistakenly made
legal commitments by drawing out the litigation. As an investor I would take
the second view. The deposition video also shows Spiegel is clearly CEO
material.

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nashequilibrium
Does anyone doubt that Facebook actually offered $3billion and google
$4billion? Could that have been done as hype?

Snapchat Landed Sony Entertainment CEO Michael Lynton As An Investor, Board
Member. [http://www.businessinsider.com/snapchat-sony-
entertainment-c...](http://www.businessinsider.com/snapchat-sony-
entertainment-ceo-investor-2013-12#ixzz2nCkwsu5P)

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skizm
Is "founder liquidity" exactly like what it sounds? Does that money go right
into the founders' personal bank accounts?

~~~
cheald
More or less, yes. The founders sell some of their stake for cash so that they
are left free to focus on the company rather than worrying if they are going
to make rent.

~~~
danhak
I don't think anybody's worried about making rent:

[http://la.curbed.com/archives/2013/12/snapchat_cofounder_jus...](http://la.curbed.com/archives/2013/12/snapchat_cofounder_just_dropped_21mm_on_a_house_in_venice.php)

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edta
I bet the "Single, Undisclosed Investor" is Tencent

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stusmall
Why do you guess that?

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edta
"However, it’s now confirmed through court documents and TechCrunch’s inside
sources that Tencent has already invested in Snapchat, likely during the
Series B round."

Given the fact they secretly invested in series B round and didn't disclose
it.

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vtmountainman
these guys are so incredibly douchey i can't be bothered to use their shit.

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pshin45
I feel like Snapchat would be the perfect way for flash sales sites like
Groupon et al to advertise - Think targeted/exclusive limited-time-only
coupons.

It would be Daily Deals 2.0 - Mobile-first and and ultra time-constrained to
induce even more impulse purchases.

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foobarqux
Does SecondMarket still let you buy securities of private companies?

~~~
robbiemitchell
Only if the companies shares allow it (and, if applicable, the company itself
approves it.)

~~~
foobarqux
My question is are the shares of any company available for purchase currently?
I didn't find a list on the site.

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rhizome
The CIA--er, Carlyle Group.

~~~
philip1209
In-Q-Tel

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rubyrescue
IVP?

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michaelochurch
Presumably a joke originally, but suddenly relevant:
[http://www.quora.com/Silicon-Valley/What-is-spider-
pooping-a...](http://www.quora.com/Silicon-Valley/What-is-spider-pooping-and-
what-does-it-have-to-do-with-Silicon-Valley-Venture-Capital)

~~~
samstave
Uh.... this cannot seriously have been a thing?

Is this how I have to get Thiel to invest in me?

~~~
michaelochurch
I can't tell if it's (a) exactly the sort of thing that _would_ catch on among
the VC elite-- which is what makes it so damn believable and funny-- but
hasn't, or (b) if it's a real thing. I'd guess mostly (a), but who knows.

~~~
samstave
Well, ___michaelochurch_ __... guess we can see if we benefit from this
practice. I am free at 4pm, your toilet or mine?

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EGreg
I think I'm gonna make a quick startup and sell it for $50M

