Pitch CEO resigns, reduces team by 2/3, and opts out from hyper-growth/VC | Hacker News Reader

Pitch CEO resigns, reduces team by 2/3, and opts out from hyper-growth/VC

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25 pointshubraumhugo14 comments

So, lemme get this straight? Slashes the workforce by 2/3rds “today” with no financial reason to. “Takes responsibility” and resigns (Needed a well earned break), probably keeps his sweet, sweet founder shares and gets a noice send off. Definitely keeps the board seat. What a hero!

I’m sure the departing staff will line up with their boxes to give him a guard of honour as they all leave the building together. It’s like a fairy tale really.

What's dumbfounding is the general vibe of the replies to his post. "You'll come back stronger" and "This says so much about you as a leader."

Yeah, I had the same thought. I’m actually usually levelheaded about this stuff, sometimes bad things happen.

This post just set me off and I dunno why. The post itself felt really sanctimonious and self unaware, then the reactions were from bizarro world. Every one was congratulatory, with next to no consideration about the people that just got the unceremonious boot.

you don't go on LinkedIn much do you.

this is how business speak goes

> However, TechCrunch confirmed with someone with knowledge of the situation that Pitch essentially returned all unspent cash to its investors pro rata, reducing the investors’ ownership stake in the process. This means that current and past employees (including all the founders) now own 80% of Pitch, while the company has enough cash to see it through a couple of years either to profitability, or to a point where it can sell at a lower price than its previous valuation (which was $600 million in 2021).

Interesting data point with regards to ownership interest and incentives.

From Techcrunch: https://techcrunch.com/2024/01/08/pitch-christian-reber-vent...

> "Pitch had raised north of $130 million in funding..."

I'm sure I'm not the only one baffled at how much they were able to raise for such a product.

I looked into Canva to compare valuations in that market. Canva is at US$ 25b [1], which is astounding to me (but down from $40b in 2021 [2]). So I guess they're looking to turn Pitch into something at 2b I guess.

IMHO the CEO acted correctly if he felt the company & product couldn't hypergrow. They didn't burn cash building a massive headcount. He worked at the product & market long enough to reasonably argue how much the company could grow. He returned money, downsized the company presumably to a point where it could self-sustain. He did good by their investors, the headcount wasn't sustainable I guess. And resign.

It's regrettable of course, so many lost their jobs but I don't see how his conduct is reprehensible.

[1] https://app.dealroom.co/companies/canva

[2] https://techcrunch.com/2021/09/14/canva-raises-200-million-a...

Non-X/Twitter Link: https://nitter.net/christianreber/status/1744292271858622518

Is this (another) canary in the coalmine? That there's no hypergrowth lurking just round the corner for most companies.

Perhaps not canary in the coal mine so much as it's reflective of many startups being overvalued with overhyped revenue projections at the Series A/B stage a couple years back.

Add to that weird regulatory stuff dampening acquisition prospects, high interest rate environment, and the ability to cheaply accomplish more and more with AI, and I think we'll see meaningful changes to the nature of venture funding and expectations over the next couple years. Will also mean down rounds and cutbacks for companies that don't weather this stuff well.

In a market as saturated as presentation software I don't really know what they expected.

My reading is that the investors / CTO (maybe?) pressured to go the sustainable path and the ex-CEO didn't agree with the plan and resigned.

We live in a new world after the interest rates changes.

Fun time is over

Seems like these decisions should have been up to the new CEO, not the one leaving who won't have to deal with the aftermath.

CTO / new CEO definitely approved these changes, founders don't have 50%+ equity at this stage of the business.

It seems they do now. They returned cash to investors and got pro-rata shares back to founders and employees putting them at 80%. Not sure what order it all happened though.

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