The team from Hashable, an app that helped manage relationships on any device, recently announced that they had shut down. They had raised a lot of money and launched at SXSW, the major annual interactive conference and festival held in Austin. They became internet darlings. Joe Rubin, director of Arc Angel Fund and founder of Funding PosHYPERLINK “http://www.fundingpost.com/”t was one of its investors along with the well-known Union Square Ventures. While he has helped launch several wildly successful companies, he admitted that this particular business did not work.
“We couldn’t get it off the ground. Once that initial buzz wore off, it could not get the business to succeed and that means that it failed. But the CEO Michael Yavonditte, is a great example of a NYC entrepreneur and founder. He didn’t put his tail between his legs and hide — he never stopped tweeting, he never went into hiding, he never cried and moved back in with his parents. Instead, he got back up and did something—he went in a completely new direction.
Now his team is raising some additional money and they’re going to build something else. You know, it’s sad to see a business shut down, but they cut their losses and the CEO is persistent.
“As an investor in early-stage companies, we’re prepared to take this risk. We know that not all of our companies are going to make a successful high payout exit. This is a venture capital fund; this is not like a T-Bill fund. This is not a secure thing where we put out money and then expect it to grow by 5% per year. We know that this is a hit-and-miss game. A lot of our portfolio companies will go out of business; we understand that from the get-go. It’s the CEO that we are investing in — sometimes they’ll have a failure but overall that person is a winner.”