It’s a tough day for The Taploid and its plucky founder Redg Snodgrass. H1-B visa issues for the startup’s UK team soured a buyout by city forum site Topix, and investors have pulled out forcing the tabloid app to shut down and the team to scatter into consulting jobs. It’s a sobering moment that illustrates why the U.S. needs to fix its startup visa situation, and that the funding crunch is real.
If the visa for Taploid’s British development team including Ed Parsons and Natasha Guerra came through, Topix would have acquired the startup. Together the innovative Taploid product could have thrived and continued turning people’s Facebook feeds into personalized tabloid news briefs. The app’s algorithm would analyze wall posts by a friend, looking for racy keywords like “booze” or “party” and show you a sensational story about how they’re descending into vice. Maybe it wasn’t solving some giant, world-changing problem, but it was fun, and the $85 billion tabloid market is nothing to scoff at.
In the end, those few visas could have created more jobs in America than the ones it would supposedly give to foreigners. But instead, the U.S. government would hold up Taploid’s visas for months to even a year if they even came through. That was too long for Topix to wait, so it backed out rather than face buying a company for its talent but having those workers trapped overseas.
Even if the deal hadn’t gone through, a few years ago Taploid could have raised some more funds and kept going on its own. But the consumer web funding situation is getting rough. Investors don’t just want a good team and the potential for traction, they want moats and a clear path to monetization. Apparently Taploid’s plan to eventually turn insights about people’s personal lives into ad targeting data wasn’t obvious enough.
Snodgrass, formerly a VP for Skout and Alcatel-Lucent, tells me how things went from bad to worse. “I had a guy on the hook for $500,000. We were going to fill the second part of our seed round’s convertible note. Then at the last second he balked.”
Despite the hint of anguish in his voice, Redg remains optimistic: “It would have been a great deal. [Topix] would have got a great team, but it didn’t happen, so for the next six months the rest of us are going back to consulting. We need to make some money for a little bit…there’s parties to throw.”
The $200,000 Taploid raised from its co-founders, Ballpark Ventures, Steve Pankhurst of Friends Reunited, and Steve Schlenker of DN Capital is all gone now, and today it will post its final gossip stories. But this is Silicon Valley, where failure is a badge of honor as long as you learned something, and I doubt someone as well connected as Redg will stay out of the game for long.