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PopExpert Files for Bankruptcy, Searches for Buyers

Posted on in Bankruptcy Attorney
PopExpert Files for Bankruptcy, Searches for Buyers

PopExpert, a tech startup that was founded in 2012 with the goal of creating an online space where members could connect with career coaches, mentors, and other professionals, filed for Chapter 11 bankruptcy in early 2016. In its early days, PopExpert was wildly successful, bringing in approximately $900,000 in 2015 and an initial $3 million from investors. After approximately one year under Chief Executive Aaron Kahlow, the company suffered severe financial troubles. Now, it is working with the bankruptcy court to restructure. Part of this restructuring is finding a buyer for the company who can turn it around and make it profitable once again.

PopExpert is one of the many tech startups that have characterized a new cultural wave in the American workplace in the first two decades of this century. By definition, “startup” simply refers to a newly-established business. But the term has a much more nuanced connotation for many. It refers to a company, generally a service that harnesses smartphone technology, that starts with a small workforce and a modern, sometimes unconventional, approach to work. For example, a startup might advertise an unlimited vacation policy or a foosball table in the break room to attract job applicants.

Why Startups Fail

Not all startups fail. Some are very successful today, like Uber. But startups, like “traditional” companies, are prone to facing and buckling under certain issues. Examples of these issues include:

  • The lack of a strong business model. This can mean that the business model is underdeveloped, it is not unique from existing businesses, or that it does not adequately address the consumer's need;
  • A lack of investment capital or a lack of interest from potential investors;
  • The product does not meet the market's needs when it is released. A service might be perfect for consumers in a few years, once technologies have progressed, but a poorly-timed release could be fatal to a startup; and
  • Disharmony among the startup's team. Startups are often heavy on establishing their company cultures, which can lead to certain candidates being overlooked because they are “not the right fit” or hiring employees who cannot work well together, either because they are too similar or because there is a lack of varied perspectives among the team.

These problems can arise in an established company as well, but because of a startup's relative size and assets compared to a larger company, they are more likely to be fatal at the startup level.

Work with a Chicago Bankruptcy Lawyer

When you start a new business, your heart and mind are on its success. Even if you have considered the possibility of its failure, there might be a mental disconnect between the idea of going bankrupt and the reality of facing bankruptcy when it happens. If you do find yourself in this position, get the legal aid you need from one of the experienced Chicago bankruptcy lawyers at Newland & Newland, LLP. Contact our firm, housed in Suite 3700 of the prestigious North LaSalle street building in Chicago, today to schedule your initial legal consultation with a member of our firm.

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