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On Deck tried to do it all. Now, it’s trying to do less, better • Technology Flow

Eric Torenberg No more Co-CEO of On Deck, a tech company trying to generate community to help founders secure capital and mentorship. Torenberg, an early product Hunt employee and founder of investment firm Village Global, took on the role only a year ago. But now, as On Deck returns to its entrepreneur-focused roots and spins off its second business, Torenberg is returning to the chairman’s position.

“Now that we are a leaner company with a focused mandate, it makes sense to return to our roots and operate as we have for most of our history,” an On Deck spokesperson said via email. “Eric is deeply involved on deck, as he has been since our inception.”

The move, shared internally with staff last week, is the latest shakeup for the business, which has cut a third of its staff after cutting a quarter of its workforce. Other changes at the well-known startup include the sunsetting of several communities and a sophisticated arm-twisting of its career as a new specialized business entity. The spin-off cements On Deck’s mission to become a more entrepreneur-focused business instead of a broad platform where anyone looking for community in the tech world can go for a range of services.

David Booth, who co-founded On Deck with Torenberg, will now be the sole chief executive 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 Technology Flow that Booth was unable to do a phone interview today due to a family obligation.

“A lot of people are happy because they don’t have to make weird trade-offs in two businesses, run by two CEOs, going after two completely different customer segments and figuring out how this one brand has expanded to make everybody happy,” a source said in the room. Everyone is talking about the same person.”

Today, people can go to the On Deck website to apply for its ODF program, which helps entrepreneurs go from ideation to fundraising. It is similar to the classic accelerator, but perhaps a step ahead of the Y Combinator. And instead of equity in exchange or a check, entrepreneurs fork over $2,990 to be part of the program. The next iteration, starting from September 27, will range from an onboarding process that introduces entrepreneurs to the community to weekly programming on skill development and workshops. There are also services that help entrepreneurs find other co-founders, prepare for the fundraising process, and create minimum viable products.

It is currently seen as the flagship program of On Deck, which runs for a full year. Other On Deck programs are shorter, 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. Although it says it’s focused on entrepreneurs, it still promotes programs for others in the startup world. At Deck Angels, to pick another example, operator angels are interested in expanding their network or starting a fund and spend $5,000 on a donation to the On Deck Access Fund (on Deck’s scholarship fund that accepting members can apply for and receive based on financial need. Over $2 million has been used since 2021 ). Execs On Deck is for experienced leaders looking for VP and C-suite roles at startups and costs $5,000.

While this seems different from Founder’s focus, On Deck sees it as relevant. “We are building the world’s most supportive community of angel investors and executives, both of whom are key partners for founders at all stages of company formation,” the company told Technology Flow via email.

The revamped and smaller product offering comes after acknowledging the difficulties in offering an on-deck focused product. “During high growth over the past two years, On Deck has launched communities serving more than ten thousand entrepreneurs and professionals. Our team has worked tirelessly to expand and cover a large surface area,” the co-founders wrote in a blog post addressing the latest layoff. “However, this broad focus has also caused significant tensions. What we always envisioned as a strength — serving multiple consumer groups and building flywheels between them — broke our vision and brand.

Tiger’s Den

A narrow focus is also practical. After Tiger Global quietly led a $40 million Series B in On Deck, its Series A round raised $650 million from the $175 million valuation investors had allocated — the hedge fund is committed to another product On Deck is developing, a venture fund, sources say.

Tiger’s Investment is designed to provide a clear view of the pre-seed and seed world. The funding round — first reported by The Information but not confirmed by On Deck — marks the startup’s formal entry into growth-stage status. In return, On Deck gets a huge valuation uptick and an anchor investor (with a good enough reputation to interest other investors) for its new venture operation.

Tiger Global has given money to On Deck’s Vision for the ODX Fund, an investment vehicle that will help launch the accelerator. Until then, On Deck has been charging membership fees to generate income, and a fund will shift that to bet on more long-term returns.

According to sources a term sheet – a document – was placed on the table. On Deck responded by announcing Tiger Fund’s commitment to other investors, eventually creating a plan for a $100 million fund that would be used to invest in companies going through its accelerator.

When it came time for the capital call, Tiger Global told the startup that its fund commitment was still due diligence, sources said. While the company declined to comment on its relationship with Tiger Global at the time, an On Deck spokesperson told Technology Flow, “Due to delays in closing fund LPs, On Deck’s holding company ODX has issued a capital credit call to the fund… to meet its commitments to portfolio companies.

Ultimately, sources said, Tiger Global scaled back its commitment to invest in the On Deck fund, even though it invested in the company itself and was close to repeating its bet. On Deck did not comment on the situation when asked. Technology Flow reached out to a Tiger Global representative for comment but did not hear back before publication time.

It’s not unheard of for companies to yank term sheet offers after streamlining term sheet offers or in response to worsening economic conditions, even though it can kill a round. It is unclear why Tiger withdrew its term sheet after leading the investment, but the company has had a tough time in the public markets.

In On Deck’s case, sources say that Tiger pulling his commitment has put On Deck in a precarious position. Without Tiger’s capital infusion, On Deck has spent right off its balance sheet, leaving just nine months of runway. Then came the layoffs.

On Deck will undergo several rounds of cuts in May and August. Related sources said that the first round of evictions was not enough. The company has built its career services platform, an effort that some employees are bullish on because of the people involved. The spin-out company has not been named, but plans to launch by October. Income is accumulating.

From accelerator to just classic investor

It slowly returns to focus. On deck employee Erica Bautista On Deck became a general partner of the fund last month after helping build the company’s European accelerator. The fund, which On Deck says is $23 million to Technology Flow, or about a fourth of its original vision.

When asked about the accelerator, On Deck said it doesn’t have an official accelerator. It also offered details that show a new focus on how it will support early-stage startups — perhaps requiring less capital: Startups are now offered $25,000 for ownership of up to 1% or 2.5%, compared with the startups’ previous deal. Offered $125,000 for 7% of the startup.

It may not have a $100 million fund to fuel its accelerator, but it has a corporate venture arm it’s using to market deals, now with more mature entrepreneurs who don’t like fixed terms. “Most comparable programs require entrepreneurs to give up equity or take capital from a specific investor,” a spokesperson said via email. “Many of our peers are experienced and established entrepreneurs who have previously gone through traditional accelerators and prefer our highly curated, non-dilutive program for entrepreneurs in the early stages of company formation.”

As On Deck makes these moves, Tiger Global has reportedly returned to its portfolio company with $5 million to fund the company, a check size that pales in comparison to its original commitment. On Deck, meanwhile, is shifting back to revenue-generating initiatives rather than basing its entire future on an accelerator model.

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

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