Nope, this is a Ponzi Scheme by definition.

"The system is destined to collapse because the earnings, if any, are less than the payments to investors. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases." - Wiki

"Daily deals juggernaut Groupon managed to significantly slash marketing costs last quarter, but its net loss in the second quarter of this year has almost tripled compared to last year as it hired more than 1,000 new employees, according to an SEC filing published this morning. Basically, the company is still growing like gangbusters but losing money like crazy in the process." - http://techcrunch.com/2011/08/10/gro...ng-costs-jump/

Groupon lost 100M last quarter, mostly due to covering capital due back to investors. They won't say that and cook the books to make it look like it's incurred operational costs.

1,000+ hires is to make the company look like it's growing, when it's all being done to make current and future investors believe the business is viable.

I've been through the exact same thing with Canopy Financial. ( http://www.google.com/search?q=+Canopy+Financial ) I've seen all of this before. Groupon is a real business, but it's not as valuable as they (themselves) make it out to be.