10 startups that hit it big before busting badly
Fab’s recent sale for a relatively measly $15 million proved yet again that no startup is safe from calamity – the design-focused ecommerce startup was once New York’s most highly capitalized startup. The rising-star startup graveyard is a well populated one – let’s take a look back at some of the most jaw-dropping descents from glory in tech history.
From Fab to Worse
Fab’s wasted funding is eye-popping, to be sure, but it doesn’t hold a penny to the $1.6 billion – about a third of which came from the government – invested in now defunct solar panel startup Solyndra. As for Better Place, well, it’s hard to say if they’re in a better place now. The Palo Alto car charger startup raised $925 million only to file for bankruptcy in 2013 – their offices were soon after caked in dirt.
We’d be remiss not to pay tribute to some of the early dotcom era’s most spectacular busts. We’ve heard recollections of WebVan’s epic post-IPO collapse during the most recent rise of grocery delivery startups. There’s Boo.com, which burned through $185 million in a year and a half on advertising, vodka, and promotional snow globes (yes, really). After going live six months later than planned, Boo.com soon after liquidated and sold its remaining assets for less than $2 million. And Pets.com bit the dust as well, despite some of the finest sock puppetry to ever hit TV advertising.
Your typical frustrated employee might refer to her boss as a con artist. If said employee worked at Pixelon, she’d have been right – a fugitive con artist, that is. The streaming video startup’s founder Michael Fenne was in fact David Kim Stanley, one of Virginia’s most wanted criminals. The whole story of Stanley’s con, his uncomfortable barn-whooping jokes, and Pixelon’s subsequent disbandment is worth a read. By comparison, Pay By Touch CEO John Rogers’s drug-fueled tailspin seems tame, but by any other measure, it’s a startup failure story full of intrigue (and cocaine).
A Destroyer Named Sue
We’ve all heard about Napster’s demise at the hands (and lawyers) of Lars Ulrich, Dr. Dre, and other artists. But sometimes it doesn’t even take losing a lawsuit to see your startup collapse – streaming television service Veoh went bankrupt after defeating a lawsuit by Universal Music.
Now go forth (and be careful out there).
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