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On Deck tried to do it all. Now it tries to do less, better • londonbusinessblog.com

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Erik Torenberg is no more the co-CEO of on deck, a technology company that seeks to produce community in a way that helps founders secure capital and advice. Torenberg, an early Product Hunt employee and the founder of investment firm Village Global, took on the role only a year ago. But with On Deck returning to its founder-focused roots and splitting off its second company, Torenberg is returning to a chairmanship position.

“Now that we are a leaner company with a focused mandate, it makes sense to return to our roots and operate as we have been for much of our history,” an On Deck spokesperson said via email. “Erik will continue to be closely involved with On Deck, just as he has been since our inception.”

The move, shared internally to staff last week, is the latest shake-up for the company, which has cut a third of its workforce months after a quarter of its workforce was cut. Other changes at the well-known startup include the disappearance of several communities and the transformation of its advanced career branch into a new separate business entity. The spin-off reaffirms On Deck’s goal of becoming a more founder-oriented company rather than a broad platform where anyone looking to join a community in the world of technology can turn to a slew of services.

David Booth, who co-founded On Deck with Torenberg, will now be the sole chief executive leading the company. The company has raised tens of millions in venture capital from investors including Founders Fund, Village Global and Tiger Global. On Deck told londonbusinessblog.com that Booth was unable to do a phone interview today due to a family commitment.

“A lot of people are much happier because they don’t have to make so many weird trade-offs between two companies, run by two CEOs, chasing two completely different customer segments and figuring out how this one brand extends to make everyone happy,” said a source. in the room is talking about the same person.”

Today, people can go to On Deck’s website to sign up for the ODF program, which helps founders move from pre-idea to fundraising. It looks like a classic accelerator, but maybe a step earlier than a Y Combinator. And instead of equity in exchange or a check, the founders pay more than $2,990 to be part of the program. The next iteration, which begins September 27, will range from an onboarding process where founders are introduced to the community, to weekly skill development programming and workshops. There are also services that help founders find other co-founders, prepare for the fundraising process, and build minimally viable products.

This currently appears to be On Deck’s flagship program, taking place over the course of a full year. Other On Deck programs are shorter, ranging from eight to 10 weeks, and focus on different roles. On Deck Scale is for founders of high-growth, venture-scale companies and costs $10,000 per year. Despite saying it’s aimed at founders, it still advertises programs for others in the startup world. On Deck Angels, to cite another example, is for operator angels interested in expanding their network or starting a fund, and costs a $5,000 donation to the On Deck Access Fund (On Deck’s scholarship fund that the fellows it accepts can apply and receive based on financial need. More than $2 million has been committed since 2021). Execs On Deck is for experienced leaders seeking VP and C-suite roles at startups and costs $5,000.

While this may appear to be different from the founder’s focus on which it is advertising, On Deck considers it related. “We are building the world’s most helpful community of angel investors and executives, both of whom are critical partners for founders at all stages of company formation,” the company told londonbusinessblog.com via email.

The revamped and smaller product offering comes after On Deck admitted that it is struggling to offer a targeted product. “Over the past two years of hypergrowth, On Deck has launched communities serving more than 10,000 founders and career professionals. Our team worked tirelessly to expand and cover a large area,” the co-founders wrote in a blog post to deal with the latest layoff. “However, this broad focus also created considerable tensions. What we have always projected as a force – serving multiple user groups and building flywheels between them – also broke our focus and our brand.”

Tiger’s den

The narrowed focus is also a matter of practicality. After Tiger Global quietly led a $40 million Series B in On Deck, assigning it a $650 million valuation, higher than the $175 million valuation it was assigned by investors during its Series A round — the hedge fund that committed to another product being developed by On Deck, a venture fund, sources say.

Tiger’s investment was intended to give it a clearer picture of the pre-seed and seed world. The financing round — first reported by The Information but unconfirmed by On Deck – appeared to be the startup’s official entry into the growth phase. In return, On Deck got a huge valuation boost and an anchor investor for its new venture operation (one that probably had enough of a well-known reputation to get other investors interested).

Tiger Global then put money into On Deck’s vision for an ODX fund, an investment vehicle that would help it launch an accelerator. Until then, On Deck charged membership fees to generate income, and a fund would shift it to bet on more long-term returns.

Sources say a term sheet – a document – has been put on the table. In response, On Deck began to advertise the Tiger fund’s commitment to other investors, eventually drafting a plan for a $100 million fund that it could use to invest in companies going through its accelerator.

When it came time for a capital call, sources said Tiger Global told the startup its fund commitment was still in legal due diligence. While the company declined to comment on its relationship with Tiger Global during that time, an On Deck spokesperson told londonbusinessblog.com that “due to the delays in closing LPs of funds, On Deck’s holding company has issued an equity loan call to the ODX fund.” has provided to … to meet its obligations to portfolio companies.”

Ultimately, sources say Tiger Global has withdrawn its commitment to invest in the On Deck fund, despite investing in the company itself and seemingly getting close to repeating its bets. On Deck did not comment on this situation when asked. londonbusinessblog.com reached out to a Tiger Global spokesperson for comment, but heard nothing back before publishing.

It’s not unheard of to see companies pull offers off termsheets after doing due diligence or in response to a deteriorating economic environment, despite the fact that it could ruin a round. It’s unclear why Tiger withdrew his term sheet after leading an investment, but the company has obviously struggled in the public markets.

In the case of On Deck, sources say Tiger’s withdrawal from his contract put On Deck in a precarious position. Without Tiger’s capital injection, On Deck would have spent straight from its balance sheet, leaving it with only nine months of runway. Then came the layoffs.

On Deck would go through several cuts in May and August. The first round of layoffs was not enough, sources said. The company subsequently developed its career services platform, an effort that some employees are excited about because of the individuals involved. The spin-out company has no name but plans to launch in October. It generates income.

From accelerator to just a classic investor

It’s a slow return to focus. On deck employee Erika Batista became a general partner of On Deck’s fund last month after helping build the company’s European accelerator. The fund, On Deck tells londonbusinessblog.com, is $23 million, or about a quarter of its original vision.

When asked about the throttle, On Deck said it no longer has a formal throttle. It provided a detail that showed a new vision of how it supports early-stage startups — perhaps one that requires less capital: Startups are now being offered $25,000 for 1% or up to 2.5% of ownership, compared to the previous deal in which startups were offered $125,000 for 7% of the startup.

It may not have a $100 million fund to fuel its accelerator, but it does have a corporate venture arm that uses it to negotiate market deals, now with more mature founders who don’t like set terms. “Most similar programs require founders to give up equity or take capital from a specific investor,” a spokesperson said via email. “Many of our fellows are experienced and returning founders who have gone through traditional accelerators in the past and prefer our highly curated, non-dilutive founders program in the earliest stages of company formation. “

Since On Deck took these steps, Tiger Global has reportedly returned to its portfolio business with $5 million for the company’s fund, a check that reportedly pales in comparison to its original commitment. On Deck, meanwhile, is switching back to revenue-generating programs rather than basing the entire future on the accelerator model.

“Tiger Global is a valued LP in our fund and in our business,” a spokesperson said via email. “We have no further comment on this relationship.”


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