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BetterWorks, one of the most well known startups to emerge from Los Angeles seems to have hit an air pocket. The company which was started by super angel, Paige Craig (along with Zao Yang and George Ishii) is said to have laid off close to thirty people, a very credible source of mine tells me. The company is said to be looking at making some dire choices. I left voice mail for Craig and emailed him and am awaiting a comment from him.
I emailed his lead investor, Satish Dharamraj of Redpoint Ventures, who is offline for family reasons and pointed me back to Craig. My attempts to reach some of his other investors in the company have drawn a naught as well. Dharamraj is the lead investor in the company which raised a whopping $8 million in August last year. Forbes put the estimated valuation of the company at $100 million and recently called it one of the 10 startups changing the world.
Craig, who dodged my phone calls and repeated requests told Pando Daily:
The outside sales model is a big risk. When we were on-boarding early adopters, the signals were that it was working. Once we got past the early adopters, the real numbers didn’t justify the cost.
To that I say, keep spinning dude!
Other investors in the company include Jeff Clavier of SoftechVC and Ron Conway’s SV Angel. The company also attracted angel dollars from well known angels such as Naval Ravikant of Angel List, Keith Rabois, COO of Square, Michael Jones ex-MySpace, Brian McClendon, VP of engineering at Google and Yishan Wong, a director of engineering at Facebook.
BetterWorks describes itself an employee perks program. The idea was just as Google and Facebook offer a variety of perks (meals, coffee, gym, etc.) to their employees, startups (and others) could use BetterWorks’ platform to offer perks to their employees. And because it can aggregate a lot of employees, the company could get better offers for the employees and the whole process could be managed through its web-based interface.
Update: I used exclusive in the headline, but later was told by Erin Griffiths that PandoDaily beat me to the punch. Apologies to them and to the readers.