SpinVox Paying Staff In Stock To Save On Costs

80 Comments

Credit: masochismtango

The much-talked about voice-to-text firm SpinVox is trying to pay staff in stock instead of salary this summer to save money, we have learned and confirmed – despite getting $100 million funding only last year. The company said: “We are offering all of our employees the opportunity to exchange all, part or none of their salary in July and August for share options, according to their wishes … It’s part of reacting to the global credit crunch. We’ve seen other companies take other kinds of measures.”

The spokesperson said the move is voluntary and “in keeping with SpinVox’s approach of being as flexible as possible and widening share ownership”. Stock is given routinely on occasions like anniversaries of service, she said, and: “There’s total freedom to opt in or take salary as normal.”

The invitation will raise an eyebrow, coming after SpinVox raised $100 million in March 2008 from Goldman Sachs, along with *GLG* Partners, Blue Mountain Capital Management and Toscafund Asset Management. That was one of the biggest venture fundings we saw in Europe last year, and took SpinVox’s total venture funding to $200 million since it was founded in 2003. CEO Christina Domecq said it valued SpinVox at “in excess of $500 million”.

Co-founder Daniel Doulton last week told paidContent:UK the company would need more funding to scale the business if it wins two or three more clients like Telefonica (NYSE: TEF), with which it inked a Latin America deal last month.

The Cambridge firm enables voicemail-to-text and spoken SMS services for carriers, plus powers dictation of blog posts, social network updates etc. Though the company has been aggressively pursuing carrier deals, its eventual goal is to provide a hosted voice messaging service, in which particular words could be hyperlinked to advertising.

The company last filed accounts in December 2007, when SpinVox said it made an annual loss of £36.3 million, up from £11.6 million; revenues rose from £436,000 to £2 million. It has since then signed on 12 additional carriers, including Alltel (NYSE: AT) in the US. Previous reports have said the company has considered an IPO. SpinVox is often said to be one of the UK’s leading tech prospects, but one insider told us stock was “worthless”.

80 Comments

Been there

The title of this article should be "SpinVox Stops Paying Staff to Save on Costs." This is what CD does – all of these stories are exactly what she pulled in New York before skipping the country. I keep in touch with a few who went through that horror show with me; we shared our shock and horror as she started Spinvox, magically removed all negative webpages from the internet, somehow secured massive investment and funding . . .

My heart sincerely goes out to you, the current SV employees. It starts with uncashable paychecks, missed insurance premiums, getting a large raise but then being asked to hold your check for a couple of weeks, crazy logic for travel reimbursement "you can either get a hotel room or your airline ticket reimbursed". We who were there during the demise of New Horizons are all owed thousands and will never see it. She used the 9/11 economy as the final excuse to bail but this had been going on well before that. She destroys livelihoods without remorse. If James Whatley is a real employee, we had one of those at NH too – I think he lost his house trying to save "the company", and he wouldn't accept that she had left for Europe with the bankroll and was never coming back.

You probably have a lot riding on this – time, career, reputation. Just look for another job. Don't work for free because you will NEVER see the money. This applies to vendors too – she will not pay you. Somehow, in the end, she will get away with it too. She's running a Ponzi scheme, and just like Madoff – it will eventually catch up to her but not soon enough, and at the expense of everyone supporting her.

NHWC went down in the summer of 2002. Most of us are on our feet again, but we all bear scars from that experience. CD does have an eye for talent so try and take from solace from that. You should be okay in the long run but don't let her get any more out of you than she already has.

Fran

Baffled, I understand your scepticisim but if you think that what I and the other person wrote about the USA bancruptcy is wrong then do your own research about it.
Or perhaps you don't have because you the insider who knows it but poses as Christina's defender.
As to the question you are posting my answer is; how Madoff was able to do what he did for so long?
1. money- conections
2. money-marketing
3. money-trickery …..

Baffled

Can someone please explain how CD keeps winning the various entrepenurial accolades she's gotten in the UK the last couple of years. Sounds like a pretty dodgy track record.

Not the CEO

Not everyone here is a disgruntled ex-employee that has lost their job.
Some people could see what was happening and had the common sense to bail.
CD is full of empty promises. I know of people who were assured share options, but never came up with the goods after repeated requests to have the offer made in writing.
There is some excellent talent at SV but unfortunately the people running the joint are not to be trusted and are leading the company into the wrong direction.

I would be very interested if the media followed up some of these claims and discovered the truth about what was going on behind the closed doors.

Observer

SV will not be bought, period, any deal would fall through as soon as due diligence is done – and they know that, pity the market crashed before IPO, ruined their chances of making an even bigger killing and running for the hills.

connor sweetman

Thank you Fran!
It is about time people starting being told the truth about CD & DD. Remember their new company, TriTexNix or something like that, to keep the employees hanging in there with them while we were all awaiting and working like dogs to land the Pepsi Account? And the minute, and I mean the minute the Big Pepsi retainer came through, the doors were locked and the ugly truth started to emerge. About 35 direct employees were left hanging for months of back pay, getting medical bills because their Health Insurance was never paid, couldn't even collect unemployment because CD & DD had never paid the Employment Taxes into the system! Oh, YES! Working at New Horizon's Computer Learning Center of White Plains, NY was a real experience, now wasn't it?

And The Bankruptcy Hearing was a joke! And where was Domecq when employees were like jackals rushing to the bank with bad pay checks, hoping they could get there to find some funds available to pay their own bills? She was off Paragliding and having accidents, so she wasn't available.

There were two employees though who actually took their bad pay checks to the District Attorney's Office and pressed charges due to the extremely large funds owed to them. Funny how those two ex-employees names were never listed in the Bankruptcy Court, isn't it? Demanding Pay Checks and holding them and pressing charges of Fraud is really the only thing the Spinvox Employees can do if the laws are even similiar in England.

One employee, who was stuck for a pretty large sum of money and medical bills actually sent me a scanned image of their check from the Bankruptcy Court, I think it was for either 15 cents or 55 cents.

Once the Pepsi Money came in, Domecq and Daulton skipped town and paid NOBODY!

Spinvox Employees, please heed the words of people who have been there, done that with those two! Cut your losses and get out now.

And what happened in White Plains, NY was 2002-3. . not even 10 years ago. But the way they deceived people is not something easily forgotten. It isn't a pleasant experience to have your credit ruined because you are spending out of pocket for needed supplies at work, and then not only not get re-imbursed, but not even get paid for as long as they can keep you on the hook. This causes severe personal financial hardship for many, many years.

And I don't know about know, but Domecq had no technical knowledge at all. And it doesn't surprise me that she has been fronting a "mechanical turk" operation (look it up in wikipedia, it may surprise you what it means). Like the Grand Wizard in the Wizard of Oz "Don't look behind the curtain."

Fran

All I have read so far doesn't surprise me at all, except that Ms Chistina D. had a nerve to promote her "New"company in america where less than ten years ago did exactly the same to her previous "start up company" with final results BANKRUPTCY. The company was called New Horizons Computer Learning Center, White Plains, NY
Same story… all over again.
Some of you asked how or where she spent 100 millions?
Simple… kept it for her future good life she believes that she is entitled too. Just follow the money and you'll get the truth. Good luck to you all.
We are glad that by the bancruptcy court order Ms. Domeque is not allowed to run business(es) in america .

Bill Payer

And it needs to be acquired by a company with more resources so it isn't living hand to mouth.

Bill Payer

Not fair to put DD in the same boat as CD. Certainly a much more genuine guy. There are issues there for sure but it is a good product and ultimately will survive.

BEN

In addition to reckless spending by the executive the company has relied too heavily on human intervention. Yes competitors use humans, but not all do or as much as SpinVox. The cost of human intervention is extraordinarily high and as the company grows aggressively in new territories there is a burden to spend on marketing rather than focusing efforts on automation. Nuance may have one version of the service type, but they aren't the only player in the game.

Comments such as "sour grapes" are not accurate but they do make an easy rebuttal against any negative criticism so I can see why someone would resort to that. The fact of the matter is that the employees, past AND present, have been burdened and are continued to be burdened with shouldering the expense of the company on their on financial well being. Further to that, SpinVox's failure to pay its business partners and suppliers has also extended that burden to employees of those companies.

This was evident when a call center in Pakistan took over the business and began messaging US customers randomly asking for help since they had not been paid in months. A "rogue" group that was quickly cut off was the explanation, but the reality is that these people depended on their jobs and SpinVox's failure to pay for these conversions led to them taking over the company as a last stand.

Here's the reality. The business model was to get as many carriers signed up as quickly as possible to get the valuation of the business as high as possible to sell it to another company for massive profits for the lucky few at the top. Quickly it was evident that the game was more complex and whilst the executives scrambled to hold onto the value of the company and spent more time shopping it around globally they lost sight of what was needed… effective fiscal management, investment in technology, and a reduction in operating costs in the right manner. Clearly that did not happen.

There are unpaid bills everywhere all leading back to SpinVox. Carriers are owed monies, employees, vendors such as printers, travel agencies, health insurance companies, marketing agencies, head hunter agencies, and of course the call centers that convert the messages. All owed money, lots of it.

So sour grapes you may, but its not just ex-employees. Its the reality. And this has nothing to do with the economy other than the fact that CD's friends at Goldman and other firms simply don't have the funds to flip over to her now. SpinVox numbers never went down as the economy did, they continued to climb with new subscribers and more conversions.

JACK

The assumption that all of the respondents in this thread are "ex"-employees…is inaccurate.

Concerns regarding the financial mistreatment of the employees have been raised numerous times with the senior team to no avail. The issue is not that the company is facing tough times financially and needing to cut expenses…this is a reality for many and offering salary alternatives, in lieu of additional layoffs, is viable as long as the employees have adequate visibility into the financial health of the company so that such decisions are informed. What is not acceptable is having employees incur reasonable expenses on the company's behalf, per the direction of their management team, and not have these expenses reimbursed. What is not acceptable is a decision by the executive team to forgo payment of insurance premiums thus removing coverage from employees without notification. In both cases this unfairly places employees in financial jeopardy.

No one wants to see Spinvox implode…it serves no purpose for anyone involved. What is expected is that the senior executive duo show the proper leadership and stewardship necessary to make reasonable decisions (with reasonable transparency) for the company, shareholders AND employees. If they do not have the skill or the will to take on this challenge then they should step aside and look to the board of directors to take control.

ed dunn

<i>If they all felt so strongly why was not all this leaked whilst they were still there? </i>

Thank you!

Robin

Will be interesting to see if the major carriers in the U.S. think these are just hollow complaints and sour grapes. I bet not…

Scarlet Jester

A little out of touch I would have to say. I could well imaging that SpinVox is not the only company in this financial position at present and in fact some worse who are no longer here! This practice is not uncommon at all especially in this economic climate and those that paint it as so are ill informed. Bottom line is that they have a product that people like, the concept that they will ‘go down’ is a little ignorant at best. Even the ‘competition’ uses human input, I have seen Nuance’s technical white paper – get with it people! This company will simply be bought up as this technology and market presence will not be lost to receivers. It seems that the majority of this blog is ex-employees with a rather large chunk of bad attitude mixed with some sour grapes rounded off with a vendetta to carry out. You have lost you job, well so have many others around the world and they have clearly handled it with a little more dignity than those here! If they all felt so strongly why was not all this leaked whilst they were still there? If you all are owed so much why hot speak up when you were there or stop spending so much! Probably because they were hoping to be able to stay on I would imagine! Good luck to all I say those still there and those not – get on with it and stop moaning!

Lisa Bonfoy

I know employees who haven't been paid expenses since March and are owed $10K or more, some less. The waste, the lies, the deceit – this had to happen – the "too bad" factor is that there are some good people at SV who need jobs – Christina, Daniel, Crowfoot, and Wellstead (founding 4) know the lies they tell, others are just doing their jobs. I feel for those who are about to lose their jobs, SV is obviously going down fast.

Robert Andrews

Guys,
Thanks for coming out to us with more info here, please carry on doing so but please keep it civil and to the facts.
If you want to bring some of the spicier claims, I'd be happy to check them out via direct email.
Thanks.

Marat

Oh, please, the comments are superb! Never knew there's so much going on behind the scenes at Spinvox! Keep them coming!

Christina

I can't believe that this hasn't come out sooner. It should have told the world something that a UK company never had a deal in the UK. Sad. If not for the 31 year old CEO and her ex-boyfriend running the joint, this could have been an amazing company. What still throws me is how she blew threw 100 million in 9 months, though. That takes a special kind of moron. I mean seriously! I could start 10 companies with that money and one is bound to more successful than she made this one.

TIMMY

Mr. Whatley – you can't really believe what you posted. I'm guessing Christina is ghost-writing again!

BEN

I have personally witnessed the waste by the leadership in this company for long enough. What no one has mentioned is the lavish spending by CD on business contacts and internally. How many summer and Christmas parties did she fly every employee from all over the world to London, spending hundreds of thousands on airfare, more on hotels, expensive venues such as Kylie Minogue concerts at the O2 Arena, a private boat cruising the Thames, meals, drinks… it goes on.

Over the past 9 months after aggressive hiring of top talent globally, people who left great jobs for the promises by SpinVox, the company began an even more aggressive firing spree that continues today. Many of these employees, myself included, have been left with thousands of dollars of unpaid work expenses.

This "opportunity" that James also referenced doesn't touch on one key point. The communique by CD also points out that if enough employees don't sign up to the is program (to save money) then the company will be forced to continue with further cuts to the workforce. Doesn't sound like much of an opportunity to me. If this company was so concerned with giving employees an opportunity to earn options, why didn't they simply extend the SAYE (Save As You Earn) plan?

The doors will get blown open soon enough, especially with strong competition entering the market with automated conversion technology vs. the agents in 3rd world countries SpinVox employs to listen to every message.

JACK

Mr. Whatley…let's start out with an easy one:

Can you enlighten us on how much of the company's funding Ms. Domecq spent on her latest excursion (Race Across America) in support of the Spinvox Adventurers team (and on a side note please explain Mr. Rolls position at the company and on-going responsibilities) compared to the outstanding expenses that are currently owed to its employees many of whom have been carrying this financial burden on the company's behalf since the first quarter of this year. Should be pretty straightforward math.

To paraphrase Ms. Domecq's often quoted mantra it sounds like the employees "clipped in, climbed on" and are now being taken for a ride…

Jim Wilson

Wow….how's the Kool-Aid James?

Seriously, why don't you read the article where moco says it's "voluntary" and "total freedom" to opt for stock in place of salary.

But, now that a company spokesman is addressing the article, why don't you address all of the claims instead of the easy ones. Such as the bigger claim: SpinVox is running out of cash and looking to employees to help because they've raised $200 million and the VC community has said that's enough.

James Whatley

Hello,

An *actual* SpinVox employee here.

My name's James Whatley and I head up Social Media here at SpinVox HQ.

I'd really like to clarify some things:

1) Headline of piece:

"SpinVox Paying Staff In Stock To Save On Costs"

Well, no.
Not really.

"SpinVox Offers Staff *Opportunity* To Be Paid In Stock"

…is closer to the truth, i.e.: it's the truth.

Remember, the important parts here are 'offers' & 'opportunity'.

While this may well be part of a longer term to save money – it's actually a bloody good offer (one that I've taken up myself).

Obviously the above doesn't make such a good story on its own and headline grabbing linkbait is much more useful..

(Hell, I've done it myself – http://blog.spinvox.com/2009/05/22/spinvox-palm-a-pre-announcement )

“There’s total freedom to opt in or take salary as normal.”

See?

I'm really not one to fight like this. But it's kind of annoying when we're all working so hard to get things right. Yes times are hard, they are for all of us.

But come on…

Yours,

James Whatley
Digital & Social Media
SpinVox

Sr Account Exec

This company is being run by imcompetents, starting with CD. It looks like she is taking a play out of the California handbook. No IOU's/worthless stock.
Usless management = useless stock…
If they never go public and go out of business the stock is not worth the paper it is printed on. Somebody must have pictures of Goldman Sachs execs.

ed dunn

Jill,

If what you said is true, particulary about Goldman Sachs involvement, please contact Brian Ross at ABC or other news outlet about this.

Most of these tech media are in some sort of wink-wink collusion with these startup/VC cronies and will never expose this kind of behavior. I think you should expose this outrageous stuff to mainstream media news if it is true.

JACK

Jack & Jill have climbed the hill to pour some truth in the SpinVox "wishing well".

Fellow "voxers" near and far tell your stories on this blog.

Detail the extent of this management fraud and expose the founders for who they are!

Scott

I guess it could be OK if you have faith in the company and you can get a deal worth considering. The problem is obviously the underlying reason for the offer. very interesting idea though have some of the voice text linked to advertising. It is far fetched but in this day and age anything is possible. Lets hope the employees involved can make the right educated move that benefits them most. Everyone would find themselves in different situations, its difficult to say waht I would do, but cash is cash at the end of the day!

Scott from the <a >wind powered generators</a> hub.

JACK

Tip of the iceberg, dig deeper.

Months of unpaid travel expenses, unpaid insurance premiums, employees slow paid, unpaid vendors including outsourced (Pakistan) transcription provider.

Poorly run company whose management team is well represented by the "block head" dolls. This one is going down, yard sale forthcoming.

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