LivingSocial made huge concessions to convince some of its investors to invest another $110 million into the company, according to investors and analysts.
The investors were able to secure favorable terms at the expense of the other financiers at the company. They also received special preferred securities that make payment for a 3% annual dividend, almost guaranteeing they gain before any proceeds from company sale or initial public offering (IPO) go to earlier financiers.
The investment deal demands the LivingSocial to repay money from the latest financing round in 4 years, which will help protect investment.
The move was taken in response to the suffering of LivingSocial, like its rivals such as Groupon, from the troubled market of daily deals, which are discounts offered online on any items.
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