The company built out the first commercially successful Web-based problem-tracking system. With over $13M of funding, the company had grown to over 250 employees and was ready to scale when the dotcom bubble burst.
Situation: Market crash forces new direction
The technology built by the founder was rock solid. The problem was due to the market crash which eliminated any chance for additional equity funding in the near term. Drastic steps had to be taken immediately to salvage a remarkable suite of products.
VEER Group’s Role: Avoid catastrophic shutdown
A complete financial and strategic review commenced with heavy emphasis on the sales and marketing distribution department. A review of sales strategies, market penetration and exit possibilities were immediately addressed within the first 15 days. All senior executive positions were replaced with crisis management experts within their respective roles. Within the first 30 days, a RIF was executed on totaling 75% of the company’s FTE’s. A decentralized sales system was restructured and brought to a centralized sales and distribution department reducing operating burn by $500k per month.
Outcome: Successful restructuring, growth and exit.
Post RIF, the company realized a greater sales opportunity existed within its current customer base dramatically reducing the internal sales cycle. This provided immediate cash flow to save the company.
As the company approached sustainability, VEER Group initiated discussions where the company’s suite of products would be accretive to another technology buyer. This was a technology sale vs. a revenue play.
The company sold to a public software group in the bay area of San Francisco. Within 18 months of VEER Group’s introduction. To this day, many of the employees still work for the acquiring company and all shareholders and debt holders were more than pleased with the outcome.