Boo.com Spooks Investors
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Trying times continue to haunt Net start-ups everywhere, with VC cash no longer raining like cats and dogs. Many newcomers are getting forced out to pasture, and early investors are saying, "Don't let the door hit you on the way out."
Boo.com and CraftShop.com boast the dubious distinction of being some of the first dot-com casualties. Investors, customers, and creditors alike are left to pick through the ashes with both start-ups heading into bankruptcy proceedings. While neither tapped the public markets, both are taking a host of VC firms to the cleaners.
After CraftShop.com burned through $4.5 million in its first round of
funding, the company got an IOU from its VCs, which included CMGI's
@Ventures, for an additional $15 million pending
traffic and sales goals. After failing to meet both, checks started
bouncing like a rubber ball, and CraftShop was headed the way of the dodo.
Under pressure from well-connected rivals, the arts-and-crafts e-tailer went shopping for a suitor but came up shy. ECompanies' Craftopia and Bainlab's Ideaforest said no thanks; and instead, buzzards are circling over the wayward e-tailers' assets, including its domain name, customer list, and product information.
At the eleventh hour, on the verge of collapse, boo.com failed to scrounge together additional funding. Shuttering its doors for good, the Flash-laden site succumbed to disorganization, extravagant spending, and ultimately was crushed under the weight of its own bells and whistles.
Boo.com achieved notoriety two-fold. After a fierce media blitz, the site launched six months behind schedule and boasted high-tech, non user-friendly gimmicks. Boo's version of the Microsoft Word paperclip, a hip and sexy, cyber-salesgirl Miss Boo, greets you at the entrance and escorts you through the cyberstore, where you end up in a virtual fitting room complete with a mannequin to drag-and-drop clothes, shoes, and accessories on.
With its dam set to burst, right on the heels of the IPO market collapse, boo.com opted to grab a dance partner. But, no takers were looking to do-si-do with the damaged goods e-tailer. The fallout from the fiasco has 300 workers on the receiving end of pink slips and one thing's for sure, Miss Boo won't work in this town again.
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