Entrepreneurship – local style
Couple days ago I read in the news feed one of the local star entrepreneurs sold his company, a video/news/education? platform. That was a big thing in the news, today, however, it seems that instead of a successful exit this was more like a garage sale that left investors fuming!
The story began years ago: local young entrepreneur starts a video platform, basically interviews with subscription. By then, 2015, I could not really understand all the hype about it in terms of the product itself, it was probably about Jake Millar getting some interviews with Richard Branson in the platform and couple big brands on board. But it was all over the local business and entrepreneurship magazines.
Half a million raised with plans to grow to a 100 million business within five years, but how?
Next and the following year the company appeared to be more like an idea or a media/marketing goal, big parties, pretty much like a Silicon Valley thing.
Soon they raised more money to expand to USA, because basically nowhere else you can talk about that revenue just with a video/educational/whatever platform.
Then after more parties and a weird sequence of events the company was using NZ government money to keep paying 3 employees!?
Earlier this year Crimson Education, another NZ company, acquired the platform.
Crimson Education is a tutoring and mentoring service that charges families as much as $60,000 for the chance of getting their children into elite overseas schools. Their valuation is 360m and revenue is about 36m, so as the terms were not disclosed the final value may just have been couple millions, maybe?
It turns out Jake Millar suddenly and without warning sold Unfiltered to Crimson Education’s Jamie Beaton, for US$60,000 and US$60,000 in Crimson shares. Unbelievable! From multi-million-dollar capital raising to less than 100K!! Investors must be furious, for sure.
Crimson Education, on the other hand, is probably just another dodgy business, as it runs “ghost” offices overseas, while at the same time claimed more than half a million in wage subsidies from NZ government during 2020 to keep 77 employees…
So where is the money? Jake Millar now lives in the US and declines any interview. Apparently he may relocate to Africa…
But maybe more important, where is the actual product? A video education whatever platform? It was hard to understand how that could have been a big idea or business initially (considering other players) so I wonder why people moved in, was it just because Richard Bronson and other big names were in the paper?
An early investor commented that Millar had a “fundamentally flawed business model” selling long unstructured interviews as education and had not surrounded himself with the right people – something that was not overly obvious when he first got involved.
That seems to me more like gut feeling than running some basic checks before getting on board. As with FOMO or the “fear of missing out” a great opportunity.
Either way is sad news for other emerging entrepreneurs, as it seems that without hype or a big name or credentials in the table you won’t get any attention or capital. It is double sad to see that local investors don’t know where to put their money either.
UPDATE – Nov 2021. Jake Millar was at age 26 in Kenya, no further explanations in the media but hints of suicide. That is so sad, so wrong. It seems there is a really toxic culture or environment for local startups. Pure greed (from investors) forcing or pushing entrepreneurs to the extreme.
Goodbye 2020
