ProQuo, Which Raised $15M in Venture Capital, Quietly Shut Down—Founder Calls It “Truly A Painful Experience”
I met recently with Bob Nascenzi, the software industry executive who stepped in last May as the CEO of ProQuo, the San Diego startup that was created to help consumers control their personal information and reduce their junk mail.
I didn’t realize, however, that ProQuo had shut down. The last I heard about the company’s status was just over six months ago, when ProQuo founder Steven Gal sent out a mass e-mail to thousands of his contacts (including me) announcing Nascenzi’s appointment and his own departure to teach at Cornell University’s business school as a visiting professor. It seemed at the time like a straightforward change in CEOs.
Turns out it wasn’t. Nascenzi tells me he’s constrained in what he can say. But he says he worked with ProQuo’s chief creditor, San Jose, CA-based venture lender Western Technology Investment, to sell off the company’s assets and dissolve the corporation. Nascenzi says he shut ProQuo down at the end of July, and laid off the last six employees.
Gal, a veteran who worked at San Diego’s HNC Software and was a co-founder of ID Analytics, started ProQuo in 2007 as a way to enable consumers to review mass-market mailing lists and decide what junk mail they really wanted to receive. The service was free to consumers and the business concept was to make money by selling the customized lists of users to mass-marketing companies. ProQuo took in a total $15 million in venture capital from Draper Fisher Jurvetson of Menlo Park, CA, and San Diego’s Mission Ventures.
Mission Ventures’ Leo Spiegel confirms that ProQuo was the startup he was referring to during a San Diego Venture Group panel discussion a couple of weeks ago, when he said his firm has only shut down one portfolio company during the economic downturn. In an e-mail to me, Spiegel says “It was difficult to execute the plan given the economic [downturn] and the competitive landscape.”
I gleaned a little more insight from a recommendation for Nascenzi that Andre Durand, a ProQuo co-founder and board member, wrote on the professional networking site LinkedIn: “Bob was brought in at a very difficult time for ProQuo. The company had not yet validated it’s business model, was consuming its remaining cash quickly, and with the funding climate changed significantly for the worse, was being forced to shut down… During this period, Bob regularly communicated his progress to the board, and managed the company through a number of tricky and delicate negotiations with creditors and purchasers of the ProQuo assets. While it was unfortunate that after so much time and money, we ended dissolving ProQuo, we were very fortunate to have found Bob when we did.”
In response to my query, Gal sent me an e-mail that says, “I ceased any involvement with ProQuo as of the beginning of May, I was neither employed by the company nor on the Board when it ceased operations, and am under a confidentiality agreement with the company (as is Bob) which prevents me from divulging any information.”
The topic apparently remains sensitive. Gal also called me, saying, “In 15 years of doing these kinds of startups, this is my first failure. It was truly a painful experience, and I’m still not over it.”