The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – Kip Frey started chasing funding for high-profile startup EvoApp from the time he took over as chief executive officer last September.
Sunday night, he says, time ran out.
Monday, EvoApp closed its doors.
The Skinny asked Frey through email to recount what happened.
When was the decision made to shut down? When did you tell employees?
The decision was made on a board call on Sunday evening and employees were notified on Monday; however, we had been engaged in a process of seeking partnering opportunities for some time, and employees knew the gravity of the situation well before this week.
Did you choose not to seek any additional funding, or did you seek funding and investors declined?
I told investors I would seek bridge funding from them if I had a partnering transaction on the table that offered a reasonable path forward. No such transaction or path appeared.
You joined the firm in September – Did you realize the runway for funding would be this short or did expenses exceed plan while revenues also declined?
When I joined in September I had to start fundraising immediately.
It took five months of pretty intense effort to close.
Expenses didn’t exceed plan but revenues and new customer attraction and retention fell short of plan.
Did laid-off employees receive severance?
Employees had health benefits extended through the end of July and received some in-kind benefits, but no cash severance.
How were you able to lease space to ReverbNation so quickly? Had you been talking with them before the final decision was made to close?
As it became clear that the business would not sustain the amount of space we were occupying, I wanted to help our landlord as much as possible because he had been so gracious in taking a risk on a start-up tenant.
So I went out and found him a substitute, long-term tenant and we continued to use a subset of the space.
What are your plans now?
I will be trying to find a buyer or licensee for the EvoApp IP and attending to the wind-down of the company. Then something else.