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Prof. Ari Ginsberg on Foursquare's business model

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Excerpt from Entrepreneur -- “'Convertible debt at this later stage sends a signal that [Foursquare’s] business model is still not proven enough, and they still need to work on it and significantly ratchet it up,' says Ari Ginsberg, professor of Entrepreneurship and Management at New York University's Stern School of Business. But he noted that this may have been Foursquare’s best option at the time -- else it fork over a greater percentage of the company's equity due to a potentially reduced valuation. 'It would have been far worse to have to bite the bullet of valuation," adds Ginsberg. 'If they landed at a lower valuation they would have done far more damage.'"

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Additional coverage appeared on Reuters.