• Sat. Feb 4th, 2023

On Deck cuts 25% of staff, scales back accelerator


May 6, 2022

On Deck, a tech company that connects founders to each other, capital and advice, has laid off 25% off its staff, per sources familiar with the company. The layoffs were announced today during an internal all hands meeting, and impacts about 72 people.

Sources say that mostly operations and investing roles were impacted by layoffs. Severance packages were offered and include eight weeks of paid base salary, as well as 12 weeks of healthcare. It’s unclear if any executives were cut, but TechCrunch has reached out to On Deck for further comment and has not yet heard back.

On Deck, not to be confused with small business lender OnDeck, is a company that provides capital and network support for emerging fund managers and founders. Launched in June 2019, the company first announced a Founders Fellowship and has recently grown to offer more niche programs on specific verticals. In two years since launch, the company claims it has helped founders start over 1,000 companies and fill keep hiring roles.

One of the startup’s newer programs is ODX, an accelerator program that offers a $125,000 check, program, and network support, in exchange for 7% of a company. The program has backed 150 companies to date.

Despite this alleged growth, sources close to the company say that ODX is likely going to be scaled back, and potentially even shut down. On Deck was originally raising a fund between $100 million and $150 million from Tiger Global, a hedge fund that is breaking into the early-stage market. It appears that On Deck never closed that large of a fund, and landed closer to $40 million.

“Add into that missed sales targets on the revenue side of the biz and a ridiculous hiring sprint, they now have [nine] months of runway pre-cuts,” one of the sources said. The startup last raised known venture capital funding in March 2021, a $20 million Series A round led by Founders Fund. 

In an e-mail obtained by TechCrunch, co-founders Erik Torenberg and David Booth addressed staff about the layoffs and the accelerator.

“In 2021, we launched ODX, our accelerator. We saw an opportunity to stand up and try our hand at innovating a stagnant accelerator market. By many accounts, we succeeded in this goal,” the e-mail reads. “Unfortunately, over the same time period, the market began shifting dramatically. A few months in, the capital and accelerator markets were materially different from where they had been when we started. These factors forced us to reflect and consider how On Deck would continue for the future, support our communities and ensure long-term sustainability.”

The co-founders went on to say that they take “full responsibility. not just for what brought us to this point, but also for making sure we do right by team members.”

Mary Ann Azevedo contributed reporting to this piece. 

Current and former On Deck employees can contact Natasha Mascarenhas by e-mail at natasha.m@techcrunch.com or on Signal, a secure encrypted messaging app, at 925 609 4188.

Source link