LIPSinc’s efforts to reach a successful exit has led to a management shakeup.

Chairman and Chief Executive Michael Zapata III and Chief Operating Officer Larry Creglow left the company two weeks ago following a decision by the board of directors to bring in new leadership.

Paul Rasmussen, who had served as a strategic consultant to LIPSinc 18 months ago, has been hired to run and manage the company, which develops software products that automatically synchronize spoken words with animated mouths.

“Paul is a very experienced leader who has done eight software startups,” says Donovan Moxey, co-founder and director of business development and strategic relationships. “He’s built them from the ground up and taken a few all the way to IPO.”

Moxey says he views the leadership change as an opportunity to give LIPSinc its best chance for success.

Zapata tells Local Tech Wire that he remains “very supportive” of LIPSinc.

“I’m very confident in the strategy of the company moving forward,” says Zapata, “and continue to be very supportive and involved with the company.”

In the same two-week time period, a handful of director-level employees were let go as well, leaving LIPSinc with 15 to 20 employees. The departures followed two rounds of layoffs, first in July and then in September of last year.

Moxey says Zapata and Creglow were not asked to leave because of financial reasons.

“There is enough money to move the company forward,” says Rasmussen. “My job is to generate revenue, and that’s where the best funding in the world for a company comes from.”

Moxey says the company plans to drive and increase revenues with upgraded versions of its software for its core market – gaming and animation. Its second round of software is scheduled for release this fall. Existing clients include 2012 Inc., IonStorm, Legend Entertainment and Ubi Soft Entertainment.

Although LIPSinc will stay focused on the gaming and animation industries, it also plans to go after opportunities in wireless, the Web, customer relationship management, e-learning, e-marketing and entertainment. The software firm had sought clients in a few of these markets in 2000, but the dot-com meltdown shuttered many Web-based companies and cleaned out the coffers of others.

“Now, some opportunities are starting to present themselves — and our
approach is to qualify those prospects and leverage partners,” says Moxey. “We have some opportunities that may come to fruition in Korea, Japan, Europe and China.”

Since its inception in 1998, LIPSinc has raised approximately $11 million in venture capital financing from Belgium-based Flanders Valley Fund, Mellon Ventures in Atlanta and Tri-State Investment Group.

Company officials would not comment on whether or not it has reached
break-even.

“As founder, I’m committed to the organization, which is essentially my baby, and I’m doing everything I can to make sure the organization is successful,” says Moxey. “I don’t think our situation is any different from any other software company.”