There are always massive flameouts of venture capital funded businesses but this one is particularly egregious (though it certainly doesn’t beat this doozy).
N2N was an internet site design company. They had one client, Victoria’s Secret. Despite this lack of client diversity, venture capitalists dumped $30million into funding this start-up. And why did they do this? According to TechCrunch, Victoria’s Secret CEO Sharen Jester Turney is an N2N Commerce board member. And N2N Commerce CEO Pinchanski used to be an executive vice president at Limited Brands Direct (Limited Brands owns Victoria’s Secret).
It just goes to show you that once again, it’s WHO you know – not what you know – to help get your little business ahead (or in this case, a cool $30million dollars). Another good learning lesson for those of us with small businesses is that reliance on one or two big clients is never a good strategy.
You can read more about the N2N closing here.
What’s even more amazing is that a company (which is essentially a subsidiary) can cause the larger organization to lose $150 million before they’re willing to cut ties.
It makes me wonder what any little soap company could do with money like that. It’s practically impossible to fail with that much money.