“No physician is really good before he has killed one or two patients.” – Proverb
For those who’ve been reading, we’ve had failure on the brain recently. This is partly because its a good counterbalance to the typical survivorship bias laden stories we read and also because understanding failure is critical to the algorithms underlying our product.
Some recent failure related research we’ve issued include:
- The R.I.P. Report – Startup Death Trends & Data
- The Rise of the Acqui-hire
- 51 Startup Failure Post-Mortems
In this review of failure, we’ve looked in our venture capital database to find the most well-funded startup companies that ultimately failed or that had an undesirable exit, i.e., an asset sale or in some cases an acquisition for less than the total funding raised by the company.
As you’ll see below, the reasons for failure are varied but a few common threads do emerge such as running out of money, inability to generate sustainable revenue, bad product-market fit and losing to competitors.
And then there were some uncommon and more tragic causes of failure including:
- Financial fraud
We’ve broken down the companies that failed by the amount of funding they received and start with those that failed that raised over $100 million (Ouch). We then highlight discussion about the reasons for failure based on press reports.
Update 1 (6/23/14)
We’ve received a ton of great feedback from readers to this post and have updated the list with several more of the costliest startup flameouts shown below:
Company: 38 Studios
Select VC Investors: Rhode Island Economic Development Corporation
Add it all up, including interest, and already-cash-strapped Rhode Island could be out as much as $110 million on the loans. As Schilling sits beside the softball diamond, his company, with nearly $151 million in debt and just $22 million in assets, is being liquidated through Chapter 7 bankruptcy.
via Boston Magazine
Company: Cereva Networks
Select VC Investors: Oak Investment Partners, North Bridge Venture Partners, Intel Capital, Goldman Sachs
A victim of swiftly shrinking corporate IT budgets and a sharp drop in demand for the startup’s large-scale enterprise storage systems, the Marlborough, MA.-based company last week abruptly shut down and laid off 140 employees.
Select VC Investors: Kleiner Perkins Caufield & Byers, Goldman Sachs, DAG Ventures
“All told, the investors had sunk nearly half-a-billion dollars into Terralliance, an astounding sum given the audacity of the company’s aspirations — and the paucity of its accomplishments.”
Select VC Investors: Advanced Equities
“In April, Pixelon employees and investors were surprised to learn that the real name of Michael Fenne, the company’s founder and former chairman, was Paul Stanley. And they were more shocked to find out that Paul Stanley had been on Virginia’s most-wanted list for several years, after skipping bail following a stock-swindling conviction.”
Total Funding: Over $100M
Even industry heavyweights such as China’s Suntech Power Holdings Co Ltd and U.S.-based First Solar Inc are struggling with dwindling profits, while small, up-and-coming solar companies are finding it increasingly difficult to stay afloat.
Solyndra said it was evaluating options, including a sale of the business and licensing its copper indium gallium selenide (CIGS) technology.
Company: Webvan Group
“They spent so much money on all this infrastructure, which was basically part of their business model,” Kathman said. “But what they hoped was going to be their advantage turned out to be their downfall. They got big fast, but size turned out to be an albatross when the demand wasn’t there.”
One reason demand fell short was that Webvan wasn’t as convenient as it billed itself, Kathman said.
Company: Better Place
The bet was risky because it required large geographies — indeed, entire nations — to adopt the technology in order for it to scale successfully. The company chose small countries like Israel and Denmark to test its model, but the company’s upfront costs kept mounting, and it kept delaying debuts. Also, a number of competing electric car efforts, including the venture by new company Tesla but also by the Big 3 and other manufacturers, kept the industry from adopting any one standard.
Company: Amp’d Mobile
Maybe it was Verizon’s most recent in-court request to stop serving up costly airwaves for which it couldn’t pay, maybe it was the cold reality that it’ll allegedly have a mere $9,000 in the bank as of next Monday — but at any rate, Amp’d Mobile appears ready to throw in the towel.
Select VC Investors: Alloy Ventures, Walden Venture Capital
In a statement posted on the site, the company said the move was taken because “the advertising and capital markets have changed so fundamentally that it is now impossible to continue our infomediary incentive programs and benefits.” . . . The company saw traffic to its Web site drop significantly during the last six months of 2000. In June, the site was drawing visitors 2 million visitors each month, according to Nielsen/NetRatings. That number dropped to less than 600,000 by December.
If making money on operations was a near impossibility, Kozmo seemed perpetually on the precipice of tapping into the public equity markets. Meanwhile, it floated other plans, like starting a print catalogue and delivering for local retailers. But then they discovered that other retailers had their own deliverymen.
Select VC Investors: Bessemer Venture Partners, Sequoia Capital
The company also said it was on the verge of being delisted from the Nasdaq stock exchange. The exchange sent a notice to eToys, threatening to remove the company by May 2 because it has failed to maintain at least a $1 share price for 30 consecutive days, according to Gary Gerdemann, spokesman for eToys.
The events were not a complete surprise, given that company executives had cautioned late last year that eToys had only enough cash to remain open through March.
Company: Caspian Networks
First core routing. Then P2P networking. Then net neutrality. Investors apparently put the kibosh on the company before it crow-barred itself into another communications fad.
via Light Reading
Company: Pay By Touch
Select VC Investors: Mobius Venture Capital, Rembrandt Venture Partners
Despite those early customers, processing fingerprint payments has not taken off as expected. Pay By Touch claims that it has fingerprint scanners in 3,000 stores, but the privately held company has never disclosed how many transactions it processes. For millions of consumers accustomed to using credit and debit cards, the proposition of using a fingerprint hasn’t been all that appealing. “It’s hard to fight the credit-card companies,” says Gartner (IT) analyst Avivah Litan. “Consumers are so used to racking up frequent-flier miles and other rewards that it’s like a David vs. Goliath situation. There’s just not much of a value proposition for the consumer to use a fingerprint.”
Company: RealNames Corporation
RealNames said it had no choice to but to close operations as Microsoft was its primary distribution partner. Microsoft was owed $25 million for RealNames “resolutions” already delivered over the past two years and remained unwilling to bet that RealNames would become successful in the long-term. In addition, Microsoft expressed concerns about the quality of RealNames keywords that were sold.
The bad guy in all of this is clear: Microsoft, at least when reading the commentary posted on the weblog run by RealNames founder and former CEO Keith Teare, as well as comments he’s made to the press.
Company: Procket Networks
Select VC Investors: New Enterprise Associates, Institutional Venture Partners
Since introducing its products more than a year ago, Procket has only a handful of customers, mostly including universities and small carriers. Its most prominent customer is NTT in Japan, which also uses Cisco and Juniper gear. It has yet to announce a major deal in the North American market.
Select VC Investors: Arts Alliance
“The firm mis-timed and failed to execute on a good idea,” Torris said. “They started by keeping most of their target audience out,” she added, referring to the need for high-speed connections to easily use the site.
Torris said Boo.com also spent too much on advertising and promotions and failed to keep pushing forward on technology innovations. She pointed out that sites such as Landsend.com now feature similar “try on” technology and that third party vendors have begun to develop similar Web sites.
via eCommerce Times
Company: DeNovis, Inc.
In a Boston Globe interview in January, he had indicated that the company’s financial performance was a pressing concern. He said the $22 million in venture capital the company raised nine months ago was effectively its last chance.
But having spent such a large sum of venture capital, DeNovis needed to go public or find a deep-pocketed buyer to return a large profit to its investors. Burkett said at the time, ”I only hear that about 11 times a day.”
via Boston Globe
Company: Savaje Technologies
Select VC Investors: VantagePoint Venture Partners, RRE Ventures
Now the company is close to closing its doors as it seeks additional funding from venture capitalists. The company, which employs about 140 people, had furloughed its developers and some other employees early in October, asking them to use up their vacation time or go on unpaid leave while Savaje moved to find its way out of its financial troubles.
Select VC Investors: Hummer Winblad Partners, Bowman Capital
Almost from the start, Pets.com was a losing proposition, despite its backers’ talk about how much money consumers lavish on their pets. Many pet supplies are heavy and costly to ship — cat litter, cans of dog food — and the firm couldn’t sell enough higher-profit items such as pet toys. Moreover, to attract customers, the company depended heavily on discounts, said Jupiter Communications analyst Heather Dougherty. As a result, the firm was selling supplies below cost the entire time.
Company: COPAN Systems
The COPAN product was well differentiated. The weakness was their not understanding, focusing and exploiting its sweet spot. A consequence of an incomplete or erroneous market understanding and a sole reliance on the internal body of experience and knowledge.
ARM server chip designer Calxeda has shut down as one of its executives told The Register: “We simply ran out of money.”
via The Register
Total Funding: $75M – $100M
Company: Canopy Financial
…company management discovered earlier this month financial records provided to investors and lenders that were “fraudulent,” as well as “significant financial and accounting irregularities.”
Company: Soapstone Networks
Soapstone was an underdog from the start. Even as a known quantity, it was going to have to wrestle with the slow process of qualification at big carriers. The recession certainly didn’t help. And it seems to me (and one source from outside Soapstone agrees) that while Soapstone wasn’t entirely wrapped up in PBB-TE (Provider Backbone Bridging – Traffic Engineering), the stall in that technology’s ascent was a contributing factor, too.
via Light Reading
Company: Claria Corporation
The company realized that there were too many ad networks out there, and with the souring outlook for advertising, it made better sense to close shop and sell the company’s extensive set of patents, the source said.
After the Internet bubble burst, e-currency companies tried to evolve by concentrating on business customers, but the collapse of a high-profile trailblazer such as Beenz shows that the Old Economy credit card companies have probably won the online shopping battle.
Experts believe that online currency sites such as Beenz were overtaken as a way of shopping online by credit cards, which had the advantage of being virtually universally accepted both on and offline.
Analysts have been predicting that it would be difficult for companies, like SunRocket and the more popular Vonage, to base an entire business around a VoIP service. While VoIP makes it relatively cheap to serve customers, it’s still expensive to acquire them.
Total Funding: $50M – $75M
Company: Veoh Networks
. . . the venture was pronounced dead in a tweet today by Veoh board member Todd Dagres of Spark Capital, a Boston VC firm that invested in Veoh Networks. Dagres tweeted, “Veoh is dead. Universal Music lawsuit was the main killer. Veoh won resoundingly but was mortally wounded by the senseless suit. Next.”
Company: Dash Navigation
User adoption was slow, likely because the device carried a $600 price tag (later reduced to $399), but the service won praise from many reviewers, including Om. The navigation device was designed with true mobile web access and interactivity in mind, but sales were sluggish.
Company: Move Networks
So what went wrong? For one thing, Move Networks never reached critical mass on the consumer side of things; despite early success with ABC, Fox, the CW, and others, many media companies shied away from the technology because it required a plugin that not many consumers had installed. This created a vicious chicken-and-egg problem: How do you get people to install the plugin if it’s not being used to deliver good premium content? And how do you get good premium content unless people already have the plugin installed?
By trying to play in the pure storage business, Nirvanix found itself in a market that, over the past five years, became increasingly commoditized by Amazon Web Services, Windows Azure and now Google Compute Engine, which have all been engaging in a price war. With no service to offer on top of its storage, Nirvanix did not stand a great chance of differentiating from such large competitors.
Company: Expand Networks
Although Expand Networks won appreciation for its technology, its operational performance was much less impressive. The court documents show that it was losing $ 250,000 a month and had $ 11 million revenue in 2010. Although it was a pioneer in its field, it failed to make a breakthrough.
The San Francisco-based technology firm’s board of directors voted for an immediate shutdown after the company failed to raise enough capital to continue operating. “We worked diligently for this not to happen,” said Ecast vice-president of network operations Scott Walker. “We appreciate all the support from jukebox operators and the industry.”
via Vending Times
“Companies that joined in during the last few years are primarily the ones dropping out. Many never had a sound business model to begin [with]. Edgix is one example. The company was basically a carbon copy of Cidera and other ISP caching solutions, with little new to offer. They basically launched a platform and went into business believing they would quickly generate revenue. Unfortunately for companies such as Edgix, once you continually say to investors, ‘There is a market out there and we can own it,’ you start to believe it yourself.”
Two months later, DoubleTwist bowed to the inevitable. “No one was surprised by this,” Williamson told the San Francisco Chronicle, “but everyone was disappointed. We had a great product and a great team — we just didn’t have the revenues.”
via Bio-IT World
Company: Sequoia Communications
Luis Arzubi, a general partner at Tallwood Ventures, told EE Times that Sequoia (San Diego) was forced to cease operations despite having working parts and customers because it failed to raise the needed capital to continue. The company and its investors “basically had no choice,” he said.
via EE Times
The company had raised $4 million earlier this year from existing investors, but Chantel said the company was looking to raise $8 to 10 million to become cash positive with its new white-label strategy. Unforunately, “there wasn’t enough runway to execute the plan,” he said.
Total Funding: $25M – $50M
“No matter what, you’ll need $70 million to take [Nanochip's technology] into production,” he [ CEO Gordon Knight] said.
That’s a large hurdle considering established chip companies have not been very active buyers lately and venture investors only put $327 million in chip deals in the first half of this year – not even half the amount for the same time last year, according to VentureSource, a research unit of Dow Jones & Co.
Joost attracted investment — $45 million to be exact — because it appeared to be the antithesis of YouTube, suspected by the networks of enabling and then turning a blind eye to piracy. Indeed, news coverage at the time billed Joost as a “YouTube killer.” But while YouTube proved popular, was acquired by Google and came to dominate web video, adoption of Joost was stunted by its peer-to-peer technology, which allowed high-quality video but required a clunky software download.
via Crain’s New York
Our source tells us that the sale is a do-or-die scenario because the company is running out of cash: “The price is very low. No one is making any money.” . . . the music industry has been hit hard with cannibalisation from digital sales and piracy. And the promise of new revenues, on the back of the explosion in mobile and internet usage, have yet to materialise for most music companies, with Apple’s iTunes dominating the market with more than a 60 percent share.
Company: Color Labs
Nevertheless, the app simply failed to gain much traction with users, with reviewers often commenting that Color appeared to be an app trying to solve a problem that didn’t seem to exist.
“In the soon-to-be end, Digg will become known as the first network to die from social fatigue,” wrote Mike Phillips in June 2010. “Facebook and Twitter are booming, LinkedIn is holding steady and even Myspace seems to have settled into a niche. But Digg is in a deadly, unrecoverable tail spin.
“The fact is, people – real people – are beginning to tire. Submit this, upload that, vote on this, ‘like’ that, be my ‘friend’, check in here, suggest this, retweet that … there’s already so much to do. The only thing left to ‘Digg’ is a grave.”
via The Guardian
Company: Goodmail Systems
Daniel Dreymann, cofounder and CEO of Goodmail, said the biggest reason for the shutdown was an aborted acquisition attempt by a firm he would only call a “Fortune 500 company.”
Xeround is shutting down their MySQL Database as a Service (DBaaS) because their free instances, while popular, simply did not convert into sufficient paid instances to support the company.
“Even with all our efforts to recover throughout this past year, we found ourselves in a position in which the debt load of the company was simply too much to overcome. Our bank foreclosed on its loan which means they are taking over the company’s assets and collecting all remaining payments. As a result they have forced the company to shut down.”
The technical and managerial incompetence of the VCs and those they hired drove the company into the ground. All but 10 of the 240 employees were fired, laid off, or quit. All of the $40+ million in venture capital was squandered. The monthly operating profit turned to loss as more talentless executives were hired who threw out the company’s old, useful products and put their blind faith in engineers who spent millions building complicated software that solved no business problems.
via Content Wire
Like most other nanotech companies, Optiva took a while to get its product out. It shifted focus, its technology changed, as did the market. Its “polarizer” technology was supposed to be sold for use in wrist watch, calculator and PDA displays, but as VentureWire reports, suddenly the people who already made the displays found a glut of scrap material, which was also suitable, thus resulting in a rapid drop in market prices.
While the company says it suffered in an unfavorable economic climate, credit card fraud also played a part in its demise. “We have been the victims of organized credit card fraud,” says Levitan, who says Flooz was hit for $300,000 for transactions charged to card numbers stolen by an international crime ring. The company’s credit card processor was holding $1 million in Flooz’s funds to cover chargebacks, says Levitan.
Despite claiming to be the largest independent ad exchange and at one time being seen as a serious competitor to Google Adwords, it seems that they were unable to make enough money or sell the company to potential buyers.
Company: Microdisplay Corporation
“We knew that we were entering a mature, competitive market, and that we had a narrow window in which to succeed. We developed a TV with a unique display technology, excellent picture quality and a low cost, and we saw an opportunity. Unfortunately, the recent uncertainty in the TV industry, highlighted by particularly slow sales in May, made it virtually impossible to introduce a new type of projection TV at this time.”
…if it has failed, it’s probably because the name is tough to spell and unintuitive to pronounce (every story about Cuil has to remind you that it’s pronounced “cool”), and because it couldn’t live up to its hyperbolic claims of outperforming Google.
Company: TrueSAN Networks
…a turnaround plan that founder and CEO Tom Isakovich presented to its board of directors last week failed to convince the company’s backers to stump up more cash.
Company: Asempra Technologies
Why did Asempra cease trading – which, by the way, happened so fast its PR agency knew nothing of the asset sale to Bakbone? The probability is that it ran into cash flow problems in the recession and the investing VCaps were reluctant to go through another funding round. Three million dollars does not look like anywhere a worthwhile exit strategy for the three VC firms, not with $29m in the Asempra can, but it is something to pull out of the failed venture.
via The Register
Just because you run a private company that does not have to file quarterly financial statements with the SEC does not make it okay to cook your books. The CEO and CFO of Seattle-based CRM firm Entellium found that out the hard way. They were arrested by the FBI earlier this week for inflating their revenues and then lying to their board about it. The company appears to be toast.
Company: Bling Nation
Executives at several banks said that they liked Bling Nation’s business strategy but its service ultimately suffered from a lack of merchant adoption and consumers’ unwillingness to switch from bank-issued debit cards.
via American Banker
The company, which has occassionally been described as the ‘US version of Phorm’, has been dying a slow death since US authorities forced the company to abandon its targeting practices with local internet service providers in September.
NebuAd was sued in November 2008 by US web users, who alleged the company violated privacy rights by purchasing information about their web activity from ISPs, using the data to serve targeted ads.
The company was investigated for its targeting practices, which included the purchase of detailed web history from broadband providers, including search queries and browsing habits.
NebuAd argued that it did not know the web users names, phone numbers, home addresses or IP addresses and gave users the option to opt out of the service.
After being grilled in US Congress, NebuAd chief executive and founder Bob Dykes quit the company, shedding a number of staff and its PR firm in his wake, including staff from its offices in the UK.
Company: LV Sensors
…the company closed its doors in the spring after failing to raise a new round of capital. . . Though many sectors have been under pressure as venture funding is harder to get than it was a year ago, chip companies have been especially hard hit due to their high capital needs and the many years it can take to move beyond the development stage.
Total Funding: Below $25M
“Everyone thought there was an opportunity to take this company and jump it up, and operate it at a higher level and grow in a different direction,” Franklin said at the time. “We made a good attempt at that and ultimately just weren’t able to raise money around that opportunity.”
RatePoint was venture capital funded. According to a press release back in 2009, the company reported at the time that it had “closed a $10 million Series B round of funding led by Castile Ventures of Waltham, Mass., with participation by existing investors .406 Ventures and Prism VentureWorks.” Which goes to show … venture funding is no guarantee of business success.
“The capital markets willingness to invest in *daily deal* businesses has dried up. Our game plan was to raise a significant amount of capital to push this comprehensive service offering deeply into markets and, as a result, change the basis of competition in the daily deal space. We were a little late.”
The FCC study found that BusRadio, the only commercial broadcaster on school buses, had disguised commercial content as editorial and exposed kids to more commercial content than the four-minutes-per-hour limit it promised parents. . . “What happened was they were unable to get into schools because of parental protests at the local level. Without a really large audience, they were unable to attract significant advertisers.”
“We began to raise our next round of funding in May, during one of the most challenging quarters in recent history for VC investments, and despite the progress we have made operationally, we have been unable to secure funding.
As a result, the company has decided to cease operations.”
via Business Insider
Select VC Investors: Aweida Venture Partners
A big problem at Atrato has been sales. The boxes simply didn’t sell in large enough numbers. . . The new executives couldn’t turn the company around on their own, and by June of this year, it was looking for new funding and what was called a rebirth. Up to a quarter of its staff were laid off, and the company’s strategy changed so that Atrato focussed more on software than hardware. It also intended to promote OEM sales more.
We understand just 18 employees were left in July 2010.
via The Register
“We did not monetize enough to stay in business,” said [Stewart] Putney. . . Putney said the games have gotten traction, but too late. The company launched its HTML5 games on the Facebook HTML5 mobile platform in mid-October, but the audience started growing in December when time and cash had run out.
Select VC Investors: Kegonsa Capital Partners
Nacho Somalo, Alice.com’s president for the European Market, said that Alice.es closed due to lack of funding opportunities. Alice.com tried to reorganize its structure, and used the few funding yet available in their Spanish subsidiary to help their growth in the US market. But it seems they have not been able to do so.
According to Kaplan, a LucidEra representative he spoke with characterized the roots of the company, founded in 2005, as being firmly in the “SaaS 1.0″ era. This group of technology innovators had to “build a lot of their own architecture, delivery capabilities, and software-development resources,” Kaplan explains. Companies starting today can leverage platform-as-a-service capabilities and computing power from vendors such as Salesforce.com and Amazon.com, greatly reducing costly upfront capital investments and ongoing operational expenses. “[LucidEra] got caught with the heavy overhead,” Kaplan says, “and they weren’t going to continue to invest.”
via Destination CRM
Company: Intrinsic Graphics
Select VC Investors: August Capital
Intrinsic’s board decided on Monday to shut down the company and sell its assets. Intrinsic Graphics, which was founded in 1999 and backed by Sony and others, was running out of cash, according to Thomas.
Company: Savantis Systems
“We weren’t getting a lot of traction in the marketplace,” Parkinson said. “So we did a fairly detailed audit of the technology from a functional and a technical perspective.”
What he found, Parkinson said, is that the product needed more development work to meet the standards of a large corporate data center.
In addition, Parkinson said, incumbents had released new products that somewhat addressed the problem, and market research cast doubt on whether large corporations would buy a new product for such a crucial part of their network from a startup.
“Given the amount of incremental investment with the uncertain demand, we decided that the best thing to do would be to return the cash to the investors,” he said.
…the company laid off all 40 employees yesterday at noon, after being unable to attract additional venture capital funding. Existing backers Vertex and Gemini Israel Funds apparently opted against another large investment, and no new firm stepped up.
“VC appetite has really dried up for later-stage semiconductor companies,” says a former Novafora executive, reached at his home this morning. “They all want to do social networking and things like that.”
Our burn was low and we raised a total of $9 million. We were not in any danger of running out of money.
But a combination of no mission, the hostile economic environment of 2008′s downturn, and the uncertainty of the Facebook platform itself, gave us no real reason to keep going as a company.
The company realized that there were too many ad networks out there, and with the souring outlook for advertising, it made better sense to close shop and sell the company’s extensive set of patents, the source said.
ParaScale, which gained $11.37 million first-round funding in 2008, failed to get second-round funding in June this year. At the time, founder and chief technology officer Cameron Bahar said: “We have a rock star team, and a tough situation to deal with. Wish us luck.”
via The Register
Songbird, an early digital music service that aimed to compete against the iTunes, Pandoras and Spotifies of this world with an open source platform, is shutting down on June 28, after running out of money and failing to find a buyer. . . A post in Digital Trends on the closure notes that a sale of the company had fallen through at the last minute.
Select VC Investors: Cyberworks Ventures
Among the problems that Digi-Scents faced was trying to market a service that required consumers to acquire another piece of hardware, say observers. “It’s case of ‘just because you can something on the web doesn’t mean you should,’” says David Taylor, senior vice president of consultants Operon Partners. “The complexity of a technology-driven product makes it a real expensive value proposition.”
While calling Arcwave “the undisputed leader in providing wireless plant extension solutions to the cable operators,” [CEO Bill] Sickler conceded that “this market did not develop to the extent necessary to sustain a small company like Arcwave.”
He added that cable operators “have been slow to pursue the commercial services segment where Arcwave products are applicable. With neither strong revenue growth nor belief from investors and strategic partners that the market will become attractive any time soon, Arcwave has had no choice but to terminate operations.”
via Light Reading
Just two and a half weeks after founder and CEO Jody Sherman stunned the tech community by taking his own life, Ecomom will be shutting down and liquidating all its assets. . . “Everyone was surprised to discover the precipitous increase in losses over the past 2-3 months. The company’s liabilities appear to be greater than its assets and this financial burden makes it difficult to continue down the current path. In light of recent events, given the $1 million securitized bank note and the company’s dwindling cash position, the board has been in discussions with the bank to determine the next steps. Without a current prospect of further cash infusion into the company, the bank will likely ask to sweep most of the company’s cash very soon and take steps to liquidate the remaining inventory and sell assets to pay off the bank debt. At this point, it appears that the company has no other choice than to wind-down the business.”
Total Funding: Undisclosed
Select VC Investors: Mangrove Capital Partners, Index Ventures
“It is with deep regret that we inform our users, friends and fans that we will be shutting down the AllPeers service today. We are tremendously proud of the product that our team has built, and we remain convinced of the potential of adding social features like file sharing to the web browser. However, we have not achieved the kind of growth in our user base that our investors were expecting, and as a result we are not able to continue operating the service.”