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Here's the most important paragraph: "We made the strategic choice to pursue a deal with a major car company who promised a close date for a sizable transactio
by xapata 10y ago
Here's the most important paragraph:
"We made the strategic choice to pursue a deal with a major car company who promised a close date for a sizable transaction in lieu of a traditional venture capital funding round. The close date timeline extended from weeks to months, as they sought to gain the appropriate internal approvals that we (and they) thought were already in place. Throughout, we remained convinced of the close strategic fit and both sides had every expectation that the transaction would close. Despite assurances, and all parties acting in the best of faith, that didn’t happen."
Don't put all your eggs in one basket.
It's bizarre that the board advisors would let that happen. I'm curious how they'd explain the failure. If you've ever done business with an enterprise, you should know that decisions can take years, not weeks or months. Though sometimes a few days if you get to the right person at the right time.
- seibelj 10y agoIMO, it sounds like a cop-out. More likely the business was pretty shaky and no one would invest at even semi-reasonable terms, so they use the "deal fell through" excuse. Are we supposed to believe they only pursued one source of funding, which was delayed months, and during that entire time never tried to find anything else? More likely... they couldn't.
- xapata 10y agoFurther, the way to convince someone to close is to give the credible threat of going with someone else: "If you like it then you should put a ring on it."
- KallDrexx 10y agoI don't find it a cop-out at all. A massive sales opportunity came up that could potentially allow them to bootstrap the service without further investment, or investment on better terms based on the increased revenue and growth from the sale. By the time they realized the sales opportunity wasn't going through the investors that were interested had gotten pushed back without reasonable growth to back up the push-back, and uncertainty of the major deal going through, which means the investors would have wanted more for their money then they wanted before. The situation would have then spiraled out more and more as time went on. Such is why strategy and execution of these types of decisions is key for a startup to succeed.
- appetizer 10y agocop-out? more like a chicken and egg scenario. if they landed the deal the business would be less shaky and probably very viable, and they'd be able to land all the growth capital they wanted
- lighttower 10y agoI agree with you. Many tales in startup-post-mortem say, "we ran out of money." The mods preface those with, "running out of money in only the proximal cause, that is, the immediate final event before shut-down. The real reasons are seldom only ' ran out of money'"
- bhouston 10y agoInability to close a round, in a lot of words. This happens all the time if you can not properly sell your potential investors. The reasons vary but the result is the same.
- thrownblown 10y agoTLDR: Ford decided it would rather acquire Chariot wholesale than buy services from Bridj?
- BurningFrog 10y agoSometimes you only have one basket.
- inthewoods 10y agoI doubt you'll ever get an answer as to why the board would allow this to happen, but my guess would be that they were stuck between a rock and a hard place. Perhaps they had to forego a traditional VC investment because their last-round valuation was too high and the existing investors were not willing to either put up more money, or get diluted by raising money at a lower valuation. Second theory would be that they tried to raise a new round and simply had no takers, leading them to the corporate fund raise. So it may not be as simple as eggs in one baset.
- metaphorm 10y agorecreational paranoia/dancing-with-conspiracy: Maybe that "major car company" deliberately ran out the clock on them with the goal of purchasing the fraction of Bridj assets that they actually wanted at fire-sale prices, while avoiding purchasing the assets they didn't want.
- derefr 10y agoMachiavellian! I don't know about the assets (might be leased + due to creditors), but the talent is certainly now on the market for the taking.
- eyalamir1 10y agoCar manufacturers won't do that kind of stuff purely for the reason that if they want the talent/company they would just buy it at market price. They also don't have the time and risk appetite for such maneuvers. Most likely the car manufacturer just got intertwined in their own decision making, then accidentally running over the little startup.