Some companies go out with a whisper, others with a bang. In the case of online animation community MyToons, we’d call it the latter.
Not only do we know the startup has laid off its entire staff except for the founders (which equals 20 to 27 people depending on who you ask) because the lead investor refused to pony up more cash, but we’re also hearing stories from multiple sources who claim that the company’s management has all but thrown VC money out the windows, leading to the current unfortunate situation.
Among the allegations put forward by former employees who wish to remain anonymous: grave mismanagement, a complete disinterest from the company’s co-founders to turn MyToons into a revenue-generating business along with more serious accusations that the executives have been misrepresenting the company’s financial and operational status to their investors and moreover wasting VC money on personal purchases like trips to Hawaii, fancy dinners with relatives, home electronics for personal use and so on. We realize this could be simply a case of disgruntled ex-employees looking to discredit their former employers, but we currently consider the tips to be as reliable as they are detailed.
We tried calling the MyToons office for more information but nobody is answering the phone, apparently because the receptionist has been let go and there’s simply no one to handle inbound calls at the moment. We have e-mails in with all 3 co-founders of MyToons to get their side of the story.
The San Antonio Express-News has also picked up the news and apparently already got in touch with MyToons CEO Dan Kraus today. He blames the economy for the startup’s ill fate but says the company is still operational and planning new service features. Kraus reportedly claimed that any allegations about mismanagement and disrespectful behavior towards employees and investors are completely unfounded, deeming the information that was received by the newspaper unreliable because it comes from—wait for it—disgruntled ex-employees.
Either way, we’re putting MyToons in the deadpool, and along with the millions of venture capital it raised from investors like The Texas Emerging Technology Fund, Barshop Ventures and Syncom Venture Partners.
How much money went into the company was never disclosed, but our sources say $6 million went down the drain.
Update: MyToons CEO Dan Kraus responds:
Given the current economic climate, MyToons, like many other companies, has reduced its staffing and is re-structuring its operations. MyToons continues to be in business, remains committed to the platform it has built and intends to pursue all opportunities for growth.
As to the other allegations of misuse of VC funds for personal purchases and trips to Hawaii, the allegations of money missing from bank accounts, and the lack of a working business model, he says, “Not true.”