It's reasonably obvious that the investor does not agree with your assertion that "the very core of its business model does not work". You can't state something like that as inarguable fact.
I don't doubt for a second that LivingSocial is experimenting with it's models, innovating and trying new stuff. It might not work out, but the investor clearly has enough confidence that it will to invest more cash.
That's not necessarily true. They might be pushing for a liquidation for a value higher than their investment, netting a gain at everyone else's expense.
