Swarm, a decentralized crowdfunding platform which enabled companies to offer cryptographic shares with its own alt-coin has ceased operations due to an internal dispute and financial issues.
Today, Swarm co-founder and CEO Rudd Davis wrote a blog post on Medium, in an attempt to explicate the reasons of the platform’s demise.
- Co-founder and designer Ryan Denehy quits during the product delivery cycle;
- Team disagrees to open source its Software;
- Co-founder’s covert deal with Techstars (mentorship-driven startup accelerator) led to the loss of US$200,000 from Swarm’s budget.
According to Davis’ blog post, ‘Pretty Boy’ co-founder and designer Ryan Denehy quit a few weeks after the platform passed the delivery cycle.
“My designer co-founder quit a few weeks after taking over our whole product delivery cycle,” wrote Davis. “Our last guy was promising delivery in less than a week for over four months, then simply flat out disappeared. Oops.”
During his exit, Swarm co-founder Denehy secured a covert deal with Techstars, a mentorship-driven startup accelerator, and negotiated without approval from his team and the company’s CEO. The deal led to a US$200,000 loss, a blow that has prevented the platform and their team from continuing operations.
“The designer co-founder decided on the way out that he should exit with some cash, something he negotiated with Techstars. Unfortunately the new promised cash never came in from Techstars. That left us $200k in the hole with one pretty boy gone.”
“How can you fund operations with $200k+ gone? You can’t. Any more questions?” wrote Davis.
Techstars wanted Swarm to be a business that could maintain consistent revenue. This, however, has apparently conflicted with the ethos of the company.
“Does a decentralized community-owned network dedicated to disrupting the current financial ecosystem sound like an ordinary business to you?” asks Davis. “Everything we’ve done because there were people passionate enough to leave behind ordinary economic thinking and just go and do awesome things. That’s what made Swarm a Swarm.”
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