The subscription service for at-home cooking closed the day just barely above $10 per share, rounded to just $10.01. This is not only a disappointment for the company, which hoped to raise more money by selling stock at $15 to $17 to share, but also for the new investors who bought at the $10 IPO price.
Most companies target at least a 20 percent “pop” on the first day of trading to kick off their public debut on good terms. The lowering of the offering price combined with the lackluster first day of trading is a bad indicator.
And with a market cap of just below $2 billion, this is a disappointment for the investors who gave the company a $2 billion valuation at the last private round. Venture investors consider breaking even to be a failure. They want big wins that pay for the rest of the startups with poor outcomes.
Although some of the later-stage investors were protected by something called “ratchets,” a phenomenon that has become common in late-stage venture capital. Certain investors are guaranteed minimum returns in the event of…