Foursquare have just announced a new injection of funding from loans from new and current investors to the tune of $41 million. This has put the company in the position of now quickly trying to generate actual revenue and move away from the simple social check-in app they are now.
The money hasn't come from investors handing cash over to Foursquare for shares, but instead new investor Silver Lake Waterman led the financing with something that is being called a multi-year loan. Existing Foursquare investors offered loans that will convert to equity if the company's valuation rises, these investors are Andreessen Horowitz, O'Reilly AlphaTech Ventures, Spark Capital and Union Square Ventures.
This means, in reality, that Foursquare have checked themselves into a very hard place. They will now indirectly be forced to create revenue, to continue their interest and principal payments on their Silver Lake loan or risk default. Creating a steady income is going to be hard for Foursquare, as right now they're without such a cash flow.
I still maintain that they'll get acquired soon enough, and I'm surprised it hasn't happened sooner.