I haven’t seen this much public drama between founders and their investors since the FilmLoop forced merger in early 2007. Earlier today I wrote that Israeli startup KnockaTV was heading to the DeadPool. Employees, who are apparently going unpaid, are pushing the company into liquidation to try to get at least some of what is owed to them.
We dug a little more into the story, because it just didn’t make sense: the startup was well funded with $3.5 million in capital from mid 2007 and the founders, who were among the creators of ICQ, had a $407 million payday in 1998. That doesn’t guarantee the startup would be successful, but it suggests that employees wouldn’t have to worry about their paychecks this early on.
Based on rumors going around Tel Aviv, there was some sort of major fallout between Evergreen Venture Partners (the venture firm behind the financing) and company founders, particularly Sefi Visiger. Product development may have been seriously delayed. Burn rate was so high that an additional funding round was needed, and Evergreen may have demanded the founding team put up more cash instead. Tempers flared, the founders elected to shut the company down, and are reportedly supporting the employees in their efforts to liquidate it. According to one source, the liquidation will ensure that employees are paid before other creditors become too numerous.
A liquidation would knock out existing stockholders, leaving the company assets to be sold off. Quite possibly they would then be acquired by the original founding team, leaving Evergreen without any stock, or their original investment.
How much of this is true? Sefi and Evergreen won’t comment directly to us. But there is little our contacts in Israel want to discuss today other than KnockaTV and what they heard happened. Companies that closed substantial funding just a couple of months prior don’t generally fall apart immediately before launch. Evergreen’s reputation in Israel is considered excellent, whereas some members of the KnockaTV founding team are said to be major league partyers first and serious business people second. More will likely be said on this story, from both sides, before it is finally put to bed.
The sad part of all this (other than employees going unpaid) is that the product actually held promise. Our early reviews were generally positive.
Did you choose the 5 winners of the tickets to the Bootstrap meeting?
What is going on with you guys, TechCrunch team? I am disappointed. Being a Mega blog comes with responsibility! I’d expect Techrunch team to be more professional and responsible before they claim the death of a startup, without conducting an in depth understanding of the situation. Startups are you bread and butter, and you want to treat them with care, if not respect. Regardless of whether this company will end up positively or not, there are many hearts behind it (like in each and every company you are covering) who have been walking a long way together. They, like any other tech startup, deserves the benefit of the doubt BEFORE you give them such a harmful PR. Patience = professionally.
god I love the drama we Israeli’s bring to the art of the start
“Our early reviews were generally positive.”
Yes but thats said, you’ve proven yourself wrong at least once a day (and yes im counting).
“I’ve emailed the company for a comment. For now, KnockaTV goes into the TechCrunch DeadPool”
This is what you wrote in your previous post this morning. So if you fail to reach a company for comment, you make a verdict regarding its faith…. Someone is ‘playing God’… Is TechCrunch getting too powerful and arrogant? Not a wise attitude, guys.
Always sad to read stuff like this, although it kinda makes their company name and tagline sound quite funny.
as a matter of fact, i belileve all that was written above is true.
i’m a graphic designer and worked on a big animation project for knockaTV.(as a freelance animator). the project was delivered more than 4 months ago, but the payment never arrived.
i kept asking and they kept apologizing, now they just don’t answer my calls/emails anymore. they ought me about $10,000, and dcontacting them is impossible.
i know other people who also worked for them and never got their money.
right now i’m working for another start-up company and few of knocka’s developers have already arrived for a job interview – they know the ship is sinking.
it’s a sad story for knocka and an awful day for my pocket.
ICQ was a bubble company, not a real company that had to build something sustainable. They got bought because of their MediaMetrix numbers not because of their revenue growth or potential. Now, fast forward a few years. Business models are *mostly* real and revenue matters. I’ve noticed that some companies still want to “get rich” before they deserve it. Cynical founders that think a quick flip is coming should forget it — it’s not going to happen.
You should rewrite the title of this story to “Doing Business in Israel 101″
People will screw you left right and center unless you CYA big time. In Israel if you have no leverage you will almost be guaranteed to get a chunk of your ass bitten off.
I’ve seen this happen in Egypt and UAE as well.
How could I contact the employees to come work for me?
I am sorry for people that did not get paid like comment no.7 but i am happy for people like comment no.10
Anyways it’s amazing i have never heard of that comp….before LoL
Too bad – I loved this name, logo and branding…
This is why I wouldn’t invest in a start up founded by someone without any real incentive to see it to the end. The only thing these founders appear to be hungry for is time on the beach and ways to spend their money (but of course not giving it away to employees, that would be ludicrous).
John hack: you can contact knocka former employees here :
exknocka@gmail.com
Hmmm…who would have guessed that giving $3.5 million to “major league partyers” could turn out poorly?
I was a beta-tester who accessed via Firefox and Flock and here’s my 02: Interesting concept but not a lot of content. It didn’t stream well (on a T-1!) and there was no feedback link. Somebody else should pick this idea up and run with it.
Techcrunch smack down on Valentines Day. Everyone grab your uzis.
“What is going on with you guys, TechCrunch team? I am disappointed. Being a Mega blog comes with responsibility! I’d expect Techrunch team to be more professional and responsible before they claim the death of a startup, without conducting an in depth understanding of the situation. Startups are you bread and butter, and you want to treat them with care, if not respect. Regardless of whether this company will end up positively or not, there are many hearts behind it (like in each and every company you are covering) who have been walking a long way together. They, like any other tech startup, deserves the benefit of the doubt BEFORE you give them such a harmful PR. Patience = professionally.”
Its self rightous garbage articles like this that should remind everyone that bloggers aren’t real journalists and why you don’t deserve *ANY* credibility:
WHO called the founders major league partyers? Why not quote the person or people that made the claim like a REAL journalist would?
How can you tar these founders as “partyers” withouth citing examples?
And so what? Isn’t mark cuban a “major league partyer”? Is that really a sin these days?
Get a clue guys. You can’t suggest that the founders are going to phoenix the business without citing a few quotes, evidence, and hard data. Otherwise you’re just slinging mud for the vc’s or worst you’re just making things up.
Hey did you hear? Tech chrunch employees are a bunch of wankers. Or so the word on the street goes. Its true I read it in a blog.
Facts, smacks. I like the suacy gossip. If you want facts, go offline and read a boring tech magazine. TechCrunch is journalism plus personality. On the continuum between WSJ and The National Enquirer, it’s closer to the latter. And I LIKE it that way.
John Hack : Post your email. I’ll make sure that few former knock.tv employees will contact you.