Evernote, the online note-taking service, is often talked about as an IPO candidate.
By people other than CEO Phil Libin, that is, who has steadfastly maintained that he wants to put off going public as long as possible.
He just took another step back from the public markets, raising $85 million in a round that went mostly to cash out insiders and early investors.
Only a quarter of the proceeds went directly to the company's coffers. In May, Evernote raised $70 million, all of which went directly to the company.
Evernote offers a basic service for free, while charging some users for a paid version with more features.
Cash-out deals are controversial, because money that goes to employees or investors isn't going to build the company.
Notoriously, Grouponraised $950 million in late 2010 as a private company, in a deal where $809 million of the proceeds went to cash out employees and investors. In retrospect, the company could have used that money to shore up its finances—and the investors clearly overpaid, given where the stock is now.
Libin defended the deal to PandoDaily, saying that he wanted to "rotate out anyone with a short-term horizon" and replace them with long-term investors.
The company has put some of the money it's previously raised toward acquisitions, buying makers of related apps like Skitch and Penultimate.
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