On Deck tried to do it all.  Now he tries to do less, better

Eric Thorenberg it no longer is the co-executive director of on deck, a tech company that tries to produce community in a way that helps founders secure capital and advice. Thorenberg, an early Product Hunt employee and founder of investment firm Village Global, took on the role just a year ago. But now that On Deck is returning to its founder-focused roots and spinning off its second business, Thorenberg is returning to the chairman position.

“Now that we are a leaner company with a focused mandate, it makes sense to return to our origins and operate as we have for much of our history,” an On Deck spokesperson said via email. “Eric will remain deeply involved with On Deck, just as he has been from the beginning.”

The move, shared internally with staff last week, is the latest upheaval for the business, which cut a third of its staff months after that cuts a quarter of its workforce. Other changes at the well-known startup include the sunset of several communities and the spin-off of its careers unit into a new separate business entity. The spin-off cements On Deck’s goal to become a more founder-focused business, rather than a broad platform where anyone looking for a community in the tech world can turn to a set of services.

David Booth, who co-founded On Deck with Torenberg, will now be the sole CEO leading the business. The company has raised tens of millions in venture capital from investors including Founders Fund, Village Global and Tiger Global. On Deck told TechCrunch that Booth was unable to give a phone interview due to a family obligation today.

“A lot of people are a lot happier because they don’t have to make so many weird trade-offs between two businesses run by two CEOs, going after two completely different customer segments, and understanding how that one brand stretches to make everyone happy,” one source said. “Everyone in the room is talking about the same person.”

Today, people can go to On Deck’s website to apply to the ODF program, which helps founders go from pre-idea to fundraising. It looks like a classic accelerator, but maybe one step ahead of Y Combinator. And instead of equity in exchange or a check, founders give over $2,990 to be a part of the program. The next iteration, starting on September 27, ranges from an onboarding process where founders introduce themselves to the community, to weekly skills development programming and workshops. There are also services that help founders find other co-founders, prepare for the fundraising process, and build minimum viable products.

This seems to be On Deck’s flagship program at the moment, running throughout the year. Other On Deck programs are shorter, ranging from eight to 10 weeks, and focus on different roles. On Deck Scale is for founders of high-growth, venture-scale companies and costs $10,000 per year. While he says he’s focused on founders, he still promotes programs for others in the startup world. On Deck Angels, to pick another example, is for camera angels interested in expanding their network or starting a fund, and costs a $5,000 donation to the On Deck Access Fund (On Deck’s scholarship fund, for which fellows it accepts can apply and receive based on financial need.Over $2 million has been used since 2021). Execs On Deck is for experienced leaders seeking VP and senior roles in startups and costs $5,000.

Although this seems different from the focus of the founder who advertises, On Deck sees it as related. “We are building the world’s most rewarding community of angel investors and executives, both of whom are critical partners to founders at all stages of a company’s creation,” the company said in an email to TechCrunch.

The revamped and smaller product offering comes after On Deck admitted it was struggling to offer a focused product. “Over the past two years of hyper-growth, On Deck has launched communities serving more than ten thousand founders and career professionals. Our team is working tirelessly to expand and cover a large area,” the co-founders wrote in a blog post addressing the last dismissal. “However, this broad focus has also caused considerable tension. What we’ve always presented as a strength – serving multiple user groups and building flywheels between them – has also broken our focus and brand.”

the tiger’s lair

The narrow focus is also a matter of practicality. After Tiger Global quietly led a $40 million Series B in On Deck, valuing it at $650 million versus the $175 million valuation set by investors in its Series A round — the hedge fund committed to another product developed by On Deck, venture capital fund, sources say.

Tiger’s investment is designed to give it a clearer picture of the pre- and early-stage world. The funding round — first reported by The Information but unconfirmed by On Deck — appeared to be the startup’s official entry into the growth stage. In return, On Deck received a huge valuation bump and a major investor for its new venture operation (one that probably had a good enough reputation to interest other investors).

Tiger Global has continued to pour money into On Deck’s vision for an ODX fund, an investment vehicle that will help it launch an accelerator. Until now, On Deck charged membership fees to generate revenue, and the fund transferred it to bet on longer-term returns.

Sources say a term sheet – a document – has been placed on the table. In response, On Deck began touting the Tiger Fund’s commitment to other investors, eventually putting together a plan for a $100 million fund that it could use to invest in companies coming through its accelerator.

When it came time to call for capital, sources say Tiger Global told the startup that its financial commitment was still under legal review. Although the company declined to comment on its relationship with Tiger Global at the time, an On Deck spokesperson told TechCrunch that “due to delays in closing long-term fund projects, On Deck’s holding company provided an equity loan to the ODX fund to… enable it to meet its commitments to portfolio companies.”

In the end, the sources said, Tiger Global backed out of its commitment to invest in the On Deck fund, even though it had invested in the company itself and appeared to be close to repeating its bets. On Deck did not comment on this situation when asked. TechCrunch reached out to a Tiger Global spokesperson for comment, but did not hear back by the time of publication.

It’s not unheard of to see firms rip out bids for terms after they’ve done due diligence or in response to a deteriorating economic environment, despite the fact that it could break the bank. It’s not clear why Tiger pulled its term sheet after leading an investment, but of course the firm had difficult time in the public markets.

In the case of On Deck, sources say that Tiger backing out of its commitment has put On Deck in a precarious position. Without Tiger’s capital injection, On Deck was spending right from its balance sheet, leaving it with just nine months of runway left. Then came the layoffs.

On Deck will undergo several rounds of layoffs in May and August. The first round of layoffs was not enough, sources said. The company then launched its career services platform, an effort that some employees are optimistic about because of the individuals involved. The spin-off company does not have a name but plans to launch by October. It generates revenue.

From an accelerator to just a classic investor

It’s a slow return to focus. Deckhand Erica Batista became a general partner of On Deck’s fund last month after helping build the company’s European accelerator. The fund, On Deck told TechCrunch, is $23 million, or about a quarter of its original vision.

When asked about the accelerator, On Deck said that there is no official accelerator anymore. He provided details that showed a new vision for how he backs early-stage startups — perhaps one that requires less capital: Startups are now being offered $25,000 for 1 percent, or up to 2.5 percent, of ownership, in compared to the previous deal where startups were offered $125,000 for 7% of the startup.

It may not have a $100 million fund to fuel its accelerator, but it does have a corporate venture unit it uses to make market deals, now with more mature founders who don’t like fixed terms. “Most comparable programs require founders to give up equity or take equity from a specific investor,” a spokesperson said by email. “Many of our grantees are seasoned and repeat founders who have been through traditional accelerators in the past and prefer our highly curated no-dilution program for early-stage founders. “

Since On Deck made those moves, Tiger Global has reportedly returned to its portfolio company with $5 million for the company’s fund, a check size that reportedly pales in comparison to the original commitment. Meanwhile, On Deck is moving back to monetization programs instead of basing its entire future on the accelerator model.

“Tiger Global is a valued LP in our fund and in our corporation,” a spokesperson said by email. “We have no further comment on this link.”

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