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.
But the shake-up over boo.com makes CraftShop’s woes look like kindergarten
stuff. Boo’s financiers must have been sniffing glue when they ponied up a
scandalous $150 million in venture backing. Launched only six months ago,
the tres chic European fashion e-tailer has left its deep-pocketed
shareholders, which included Goldman Sachs, JP Morgan, the Benetton family,
and French entrepreneur Bernard Arnault, footing the bill.
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.
Any questions or comments, love letters or hate mail? As always, feel free
to forward them to kblack@internet.com.
