Just two years after winning a SXSW Interactive award for Mobile apps, Gowalla has officially shut down. The location-based social networking start-up, once backed by investors including Kevin Rose and Jason Calacanis, was bought by Facebook in early December of last year but only put up a good-bye notice on its website today.
This is a guest post from Eric Wiesen, a general partner at RRE. It originally appeared on his blog.
The recent acquisition of Gowalla by Facebook is just the latest incidence of the potential tension between investors and founders when a company is acquired primarily for the team rather than for the technology, product or business that they’ve built. People around the web will take the opportunity to observe that in situations where a company is acquired in this way, the founders typically get a package of equity to motivate them to join (and remain at) the acquiring company, while investors usually get anywherefrom zero to a small return on invested capital. Look around and you’ll find people willing to condemn the founders for unethically “selling out” their investors and you’ll find people who say the exact opposite, that such a company didn’t have saleable assets anyway, and so investors are owed nothing because the business failed.
Foursquare Be Hustlin'
Foursquare is, as they say, crushing it. And the news broke today that they can show you at least fifteen million reasons—or three times as many as last year—as to why this is.