Famous Failures

famous business failures

20 worst VC investments of all time

InsideCRM has a list of what it says are the twenty worst VC investments of all time. See full details here, but here’s the quick list:

1. Amp’d Mobile: $360 million, ended in bankruptcy.
2. Procket: $272 million, sold for $89 million.
3. Webvan: Valued at $1.2 billion, went bankrupt in 2001. Ate through $800 million in venture capital, ended with $830 million in losses.
4. Caspian Networks: >$300 million in funding, closed doors.
5. Pets.com: $50 million by Hummer Winblad Venture Partners, Bowman Capital, and Amazon.com Inc., did sock-puppet ads, then crashed.
6. Optiva: $41.5 million in venture capital, crashed.
7. Kozmo.com: $250 million in investment, liquidated.
8. CueCat: $185 million from investors like The Coca-Cola Co. and General Electric Co., bombed.
9. DeNovis Inc.: $125 million in venture capital, closed.
10. PointCast Inc.: Tens of millions of dollars in venture capital and a $400 million buy offer, PointCast was sold for $7 million.
11. eToys: Backed by VC firms Idealab, Highland Capital Partners LLC and Sequoia Capital Partners, ended in bankruptcy.
12. AllAdvantage: $135 million in venture capital down the drain.
13. FastForward: $54 million into the company, bankrupt.
14. Xoma: This 26-year old company has not earned a profit since its inception in 1981.
15. Flooz.com: $50 million, went broke.
16. Vanguarde Media Inc.: $60 million in VC funding, went under.
17. Pixelon.com: $16 million not remarkable, but burned through with remarkable style.
18. Bolt Media Inc.: >$60 million in venture backing, shut down.
19. DigiScents: $20 million in investment, shut down.
20. Boo.com: $120 million, went bust.

Jon Auerbach, Amp’d Mobile VC, gets a new gig

Jon Auerbach led venture capital firm, Highland Capital Partners to take part in the disastrous investment in Amp’d Mobile, a mobile content provider that burned through $360 million before going bankrupt this year. He has just left that firm and joined another, Charles River Ventures, as a general partner.

Amp’d Mobile is one of the more catastrophic investments in VC history, and Auerbach was on its board. While it’s not clear if the fiasco is the reason for Auerbach’s departure from Highland, he is landing on his feet. At Charles River Ventures, a respectable firm which already has around fifteen investments in mobile companies, Auerbach joins the company’s East Coast office to explore and expand investments in the mobile market.

We asked Auerbach about his role in the Amp’d fiasco, and he said he preferred not to comment. He said he likes to take “big swings on capitally intensive businesses going after big markets with monolithic carriers and companies that could change the world.” He said the investment in Amp’d was one of those swings that “just didn’t work out.” He also says he is glad to be involved in the project but said, “I’m focused on the future, and not the past.”

We asked Charles River’s partners about their decision to bring Auerbach on board. Bruce Sacks, a parter at the company, pointed out that that he “can’t name a successful venture capitalist that doesn’t have a huge crater” and that Auerbach has led a number of successful investments since 2000 — the year he made the switch from Wall Street Journal writer to venture capitalist.

Most notably, he co-led an early-stage investment in Starent Networks (STAR), which makes software and hardware for the distribution of multimedia to mobile phones. Starent had a $115 milion IPO in June. Auerbach also took the reins on an investment in Optasite, which has grown into the fifth largest wireless tower company in the States.

When it comes to the future, he is “cautiously optimistic” about the mobile space, and that there are significant opportunities in the spectrum and in mobile services.