Ceiling over the cafe
Being transparent is relatively easy when things are going well. When times are hard — not so much.
It was so much fun to post updates here — photos of the latest new wonderfulness to appear at LaunchPad Coworking. I was pretty active on Twitter, keeping up with the blog, and generally letting everyone know how things were going.
This past month or so has been really hard, though. And rather than sharing everything with the world, I’ve grown quiet, afraid that posting bad news would just make things worse.
I worried that if potential investors learned we were struggling, they’d be reluctant to invest. That’s a legitimate concern. But mostly I was worried about my own embarrassment. After all, I’m a successful serial investor, right? And this is an awesome idea and a great model. It’s innovative, well thought out, and in demand. How could I be struggling to get it open?
Well, we are indeed struggling.
Investors have backed out, banks are keeping their fiscal fists tightly clenched, and we owe lots of people money.
Individual coworking area
We are so, so close to opening. If we had the money we need today, we could be open in 6-8 weeks. But construction has stopped. We continue to move forward on many fronts. The reservations software is being tested, the equipment is sourced — so many things are ready to go. And our incredible team is intact. Believe it or not, we sometimes even manage to laugh and have fun as we work our asses off to figure out how to fix this.
We need help. We need investors. Or a loan. I can’t put deal details out there, because anything construed as advertising will get me in hot water with the SEC (as you can imagine this is extra infuriating given the SEC managed to look the other way at the Bernard Madoff $50 billion fiasco).
Everyone we’re working with wants us to open. And clearly Austin wants us to open. I have been getting more requests for space this past month than ever before. This economic debacle has actually made the demand for a place like LaunchPad Coworking even greater.
We’re looking for leads. Contacts who can help us make this happen.
And thanks for listening. This was a hard post to write, but it really does feel better to put it all out there.
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18 responses so far ↓
1 Mark // Feb 3, 2009 at 3:21 pm
We’re all pulling for you guys–hang in there…
2 john chandler // Feb 3, 2009 at 3:35 pm
Julie,
Thanks for posting this…Austin is indeed pulling for you.
3 Susan Price // Feb 3, 2009 at 5:10 pm
Saw this item in the Austin Business Journal about SBA lending being down 45%. Since LaunchPad is so close to being open, surely that pushes you into a good risk category? Almost there! http://austin.bizjournals.com/austin/stories/2009/02/02/daily23.html?ana=e_du_pub
4 Julie Gomoll // Feb 3, 2009 at 7:14 pm
Susan – you’d think so, wouldn’t you? SBA loan have some of the same requirements as any other business loan, though — collateral. And since we’re leasing the space, we don’t have that. If we had secured a loan before starting construction, that would be the collateral, but since we’re already so far in, we can’t. Sad but true :(
5 Clay Spinuzzi // Feb 3, 2009 at 8:23 pm
I really hope that things work out. As you said, this is a great model, especially in a down economy. Fingers crossed for you.
6 graphic granola // Feb 3, 2009 at 10:09 pm
It’s such a beautiful space. Can’t you just wave pictures of it in front of potential investors? Perhaps if you have space already pre-leased with tenants, that could serve as good collateral. Transparency can only bring solutions. We are SO pulling for you.
7 Lauren Davis // Feb 4, 2009 at 12:18 am
What about offering a killer deal to the people who want it to open most? Free use of the space forever, plus $500 worth of food and beverage, for the first 100 people to invest $1000?
Not sure how much you need or what terms make sense, but creative “VIP Membership” could work!
8 Lisa Kelly // Feb 4, 2009 at 7:07 am
Your honesty and openness is refreshing. You are courageous and top-notch in my book.
How about offering building owners equity in Launch Pad? Although I imagine you’ve already tried that.
9 Julie Gomoll // Feb 4, 2009 at 8:57 am
Thanks everyone, for your good wishes and optimism — it really helps!
Graphic Granola — we are in the testing phase of our reservation software, and will launch it as soon as possible. We won’t take money for reservations, but you’re right — it can serve as an excellent proof of concept.
Lauren — we are actively discussing something along those lines.
There’s a significant restraint we have to work within: We can’t tie anything to an investment. SEC rules say we can’t advertise. I can say “Lauren, will you invest?” and “Lauren, do you know anyone who might want to invest?” but I can’t publicly offer equity for any kind of deal.
That said, we can offer time/future food/our eternal gratitude for $X.
Lisa — the landlord is working with us to help. Unfortunately, they’re not interested in equity.
Everyone — please keep your ideas coming! We’re all ears!
10 Julie Gomoll // Feb 4, 2009 at 9:12 am
I also invite any lawyers to jump in here.
* Am I accurate in my understanding of the constraints?
* How much can I reveal here, particularly about what we’ve spent and need?
11 tomh // Feb 4, 2009 at 12:43 pm
Hang tough Julie! Let us know what plans are available for ‘true believers’.
12 Michelle Greer // Feb 4, 2009 at 2:35 pm
I’m sorry to hear this, Julie. I don’t know any investors but it’s nice to know you need help in case I run into anyone who has potential.
If there is anything I can do to help, let me know. I plan to go to LaunchPad when it opens.
13 Kelly // Feb 4, 2009 at 3:00 pm
Julie,
thanks for your transparency – i know it’s hard. But you guys have a solid operation — here’s hoping the cash markets will open for you soon. I might be interested in talking more on the investment / loan end — don’t have much but would love to see what we can do.
14 Trish // Feb 6, 2009 at 12:33 pm
Hi Julie,
Im also working on a coworking space in the Boston area and have been working with investors. I feel your pain!
I have some ideas that I would love to discuss with you — are you available for a phone conversation or private email exchange? Not about confidentiallity so much as it being a more involved conversation.
I think we might be able to help each other.
15 Kevin Dykes // Feb 7, 2009 at 3:19 am
Hi Julie –
I respect the hell out of you standing out there and having the guts to say you’re struggling. 2008 has been a motherf#@cker for many of us – Charles and I have had so many false starts – and almost there moments. I can feel your pain!
While I realize it could change the face of the space – what about landing an anchor for a portion of the space for a 12 – 18 month contract – allowing the balance of the space to function as intended. With the economic challenges – it could be a great stepping-stone growth space for some company who is trying to grow but can’t commit to a longer-term build-out commitment.
I also have another thought that I’ll send by email – good luck and keep fighting. We’ve all weathered this crap before – this when we show what we’re made of!
Kevin
16 Julie Gomoll // Feb 7, 2009 at 11:03 am
Trish – it was great talking with you last night. Welcome to the wonderful world of coworking!
Keven – thanks for the good thoughts and for the good ideas, both here and in your email. Hope you’re enjoying Hamburg :)
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