About a year ago the startup I have been contracting for was weeks away from going broke. I wrote a post about it back then.
Through some miracle they were able to secure a handful of customers over the last year, several which had signed contracts for monthly licensing, and things seemed (from my remote perspective) to be going very well both in terms of internal product development and outside sales channels finally paying off. I was personally quite optimistic about the future of the startup.
Fast forward to a few days ago and the founder called me direct to inform me that he was closing the business and had already let the other 3 full-time employees go. Ouch. And right after i had invoiced for $5k… O_O
Anyway, I suppose the writing was on the wall in more ways than one: Weeks away from running out of money only a year ago, slow sales uptake, lots of employee turnover in last 6 months (1 founder and 2 other full-time employees left). Though despite the changing lineup the product was getting very refined and we were getting excellent feedback from the few customers we had.
According to the founder the final nail in the coffin was trying to unsuccessfully secure a bridge loan to keep the business running into 2018. Said they had burned through all their cash and didn’t have any more money to keep the doors open, and that financing operations into 2018 with a loan didn’t make sense.
I’m not sure there are any great lessons here that haven’t been taught elsewhere. I don’t have any grand blog post or eloquent message to deliver about startups failing. There wasn’t a ton of ego from the founders or other employees. Everyone got along well and tried to do their best. We even had a very refined and functional product that we were selling. Some of the mistakes this company made were probably preventable, some of them probably were simply outside of their control.
I’m sad to see the startup close it’s doors but am happy to have made the relationships I did with the people who worked there. And I got a ton of great work for the portfolio out of it too, so it’s not a total loss. Since I was contract and have a full-time job already it wont impact my finances or lifestyle in any significant way, though the extra cash was nice to have.
Anyway – merry christmas and happy new year everyone! Good luck out there!