By the end of last year, when rumours spread that FilmLoop was getting into trouble, the main question seemed to be: Why? Shortly after FilmLoop went online, the company was able to announce cooperation partners like World Picture Network (WpN), iStockphoto and PhotoBucket.
Was the product, despite a dedicated Forrester Research study, overhyped?
Although similar ventures like RockYou and Slide (founded by the co-founder of PayPal) with similar products took off very successfully in terms of the number of customers?
Only yet another sign that a "Rising Dead Pool Indicates Web 2.0 Bubble is Popping" (Steve Rubel) while "FilmLoop Dips Toes Into The DeadPool" (Michael Arrington)?
It seems to turn out that we all had been wrong on this.
Michael Arrington is out with a follow-up story with insider details ("FilmLoop Betrayed By Investors") and now it reads slightly different (compiled):
In October 2006, investors were optimistic about FilmLoop.
In November 2006 the VC firm ComVentures meets with FilmLoop to tell them they must find a buyer by end of year. The FilmLoop founders made it clear that they thought they had a good chance at success and did not want to sell. FilmLoop wasn’t dominating the market, but they were not on the ropes, either.
In December 2006 ComVentures proposes Fabrik, another one of their portfolio companies, as the acquiror. Fabrik acquires FilmLoop for little more than the cash ($3 million) that FilmLoop has remaining in its bank account. Due to liquidation preference rights, the founders and all employees walk away with exactly nothing.
It’s clear that ComVentures had a significant interest in forcing a sale to Fabrik on such a short timetable, during the holidays, when competitive bids would be impossible to find. It’s also clear that this sale was not in the best interests of anyone except themselves.
One day, the founders and employees of FilmLoop had a viable company with $3 million in the bank.
The next day they had no stock, no job, and no company.
Either way, Baris Karadogan, one of the partners at ComVentures, wrote an interesting comment (read also the following one). Ever since Michael Arrington has added a question mark to his headline.
Related:
- FilmLoop: Despite A Cute Forrester Research Study, Grumpy VCs Ask "What´s your story?" (Jan. 25, 2007)
- PayPal founder's photo slideshow site gets funding (Nov. 15, 2006)
- FilmLoop Introduces FilmLoop 2.0 and Brand New Content Web Site (Nov. 09, 2006)
- FilmLoop Receives $7 Million In Series B Funding (May 01, 2006)
- FilmLoop Announces General Availability Of New FilmLoop Player (March 22, 2006)
- FilmLoop Teams With Photobucket (Jan. 24, 2006)
- FilmLoop Introduces Macintosh Version of FilmLoop Player (Jan. 10, 2006)
- World Picture Network Partners With FilmLoop (Nov. 04, 2005), like earlier PhotoBucket and iStockphoto.
- FilmLoop Introduces Visual Communications Network Amid Broad Industry Support (Sept. 19, 2005)
