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Summary:

Jobster, the much-hyped and heavily funded online-recruitment-meets-social-networking service, is out looking for more money, after burning…

Jobster, the much-hyped and heavily funded online-recruitment-meets-social-networking service, is out looking for more money, after burning through most of the $48 million it has raised since 2005. Founder and CEO Jason Goldberg left the company late last year, and has started a new social news site. Jobster, under new management, is now looking to raise more money, reports ERE.net. In a letter sent to investors, quoted in the story, the company lost about $11 million in 2007 and has less than $3 million left in the bank. Its burn rate about $1 million a month, an amount calculated from information contained in the shareholder letter, the story says.

Jobster has raised the previous funding from Ignition Partners, Mayfield, Reed Elsevier (NYSE: RUK) Ventures and Trinity Partners, and in 2006, after buying a few sites, laid off 60 employees, about 40 percent of its workforce. With the economy slowing down, recruitment startups may be heading into tougher times.

  1. For anyone who has followed the fortunes of Jobster this news comes as no surprise.

    The greatest concern for advocates of "Recruiting 2.0" is that Jobster's spectacular mismanagement and half-baked strategy will somehow be confused with the underlying premise of Jobster's social-web approach which is not without merit.

    Let's hope the new management can inspire "new money" to see the things the same way.

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  2. These numbers are staggeringly bad. I think they are headed for a down round. That will all but kill their momentum and drive away great employees. This is not going to end well.

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  3. Shame on the investors for dumping so much $$$ into this idea. That's comical that a CEO would burn through a cool $45 Million USD . . . and then either be removed by the Board and/or cruise over to start something new. Haven't we seen this before? Sure, we have. And the funny thing is that it's just as easy for the original 'CEO' (used loosely) to raise funding for a new company after failing with an old one . . . because investors see that as a positive (I know — it's counterintuitive, but true.)
    If you know anything about the VC world, it can often be more about "who you know" than the viability of your business plan and ability to execute. I'll tell you who really got screwed in this debacle: the high net-worth individuals and angels that put their $$$ under the control of Ignition Partners, Mayfield, Reed Elsevier Ventures and Trinity Partners.
    Can you blame the bad idea itself, the lack of execution, the mismanagement of upper mgmt, fiscal irresponsibility, or the "greater fools" willing to keep throwing good money after bad?
    It's tough to put a finger on, but if there's one thing we know, it's this: external capital & investment geared toward our industry will come under much greater scrutiny going forward.

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