BetterWorks, a Santa Monica, Calif.-based startup with a who’s-who of Silicon Valley behind it, just announced it’s shutting down at the end of the month.The company had raised $10 million from Redpoint Ventures, where Satish Dharmaraj, the former CEO of Zimbra, led the deal. Angel investors included startup whisperer Ron Conway, Square COO Keith Rabois, Reddit CEO Yishan Wong, SoftTech VC’s Jeff Clavier, and AngelList’s Naval Ravikant.
You win some, you lose some. Startups fail all the time. But what’s supposed to happen when you have names like this behind a company is a face-saving merger with another portfolio company, a quiet asset sale of whatever intellectual property remains, a bargain-basement acquire-hire—anything but a shut-the-doors see-ya-later.
Paige Craig, the CEO and cofounder, served in the Marine Corps and invests in or advises a long list of buzzy startups.
So what happened? We’re digging into that question. But aside from the specifics, we think that this is an example of how investing based on “social proof” doesn’t always lead to the best results. That’s when people look to others’ decisions rather than objective criteria to make tricky decisions, like which startups to back.
BetterWorks let its customers—employers—offer perks and discounts to their employees.