So with a “heavy heart” Secret’s founder David Byttow decided to “return” their investors money rather than attempt a pivot.
Sounds like a noble move, until you realize that during their last round, the two founders were allowed to cash out to the tune of $6M.
Normally astute investors put in liquidation preferences that should a company fail to get a decent exit, they would be the ones who get the money out first as they should.
Only in this case, they get their money out LAST. Out of whatever was remaining in the last round, the founders got $6M, and the investors got whatever was left if any.
Way to go Kleiner Perkins and Index Ventures! Your investors must be so proud of you.