Krystal Reflections: Is Twitter a startup again?

Twitter is a venture-backed and privately held company now. Well, that is the definition of a startup, right?

Twitter is a micro-messaging social media platform that has emerged as the leading news platform for political, corporate, celebrity personalities and entities. However, increasing the platform has been in the centre of political and geopolitical battles as fake news and censorshop have taken a toll.

The platform was acquired and delisted by Elon Musk, who is also the founder of Tesla, SpaceX and the Boring Company. The acquisition was funded by many venture capital groups, while Musk himself anchored the deal by selling some of his Tesla shares.

With almost 70% of the deal funded by VC's, the cap table looks like that a Series F startup than a company. With high traction, but bleeding, Twitter has lost its path to profitability at some point. Musk has responded by charging for verification of Twitter users and laying of a major portion of its workforce.

The flexibility of stock restructuring according to the US SEC has enabled Musk to restructure the stockholding and the board. He is now the sole director of Twitter.

The biggest question that is unanswered is how venture capital and other funds backed Musk - given that he is the CEO of atleast 4 other companies. The hard and fast rule of one startup, one CEO is out of the window. This example might be quoted in the future while more established CEO's will start to 'moonlight' into other startups, while helming the one that they founded.

While we will have to wait and see how these factors play out, Twitter is now a super funded startup with a mercurial CEO at the helm.

~Ashok Subramanian

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