OffRoad Capital, an investment banking firm founded amid the dot-com boom, is firing more than half its staff as it struggles to survive, according to a memorandum to shareholders.
Co-Chief Executives John Forlines and David Weir, former J.P. Morgan & Co. investment bankers, quit after three months in their posts, as the firm decided to separate its corporate finance business from its software unit, said the memo obtained by Bloomberg News.
"We think we can weather the storm, but it is a storm," said OffRoad founder and Chairman Stephen Pelletier, 47, who is returning to the CEO post.
At its peak in mid-2000, San Francisco-based OffRoad, which auctions stakes in start-up companies via the Internet, had more than 150 employees. It now has 38, down from 80 in February, and will have 30 after the latest cuts in the next month.
The 2-year-old firm has shelved a planned effort to raise $20 million in fresh capital, Pelletier said.
U.S. investors have lost their appetite for start-ups amid the crash of technology stocks over the last year, and as the economy has weakened. OffRoad hasn't completed a transaction since December, when it raised $15 million of a $44-million financing for C&T Access Ventures, a unit of recruiters Christian & Timbers.
Before that, OffRoad completed 13 private placements, raising $87 million for companies.
OffRoad will change its name to OffRoad Inc., which will serve as the parent to the newly separate software and investment banking businesses, Pelletier said.
Richard Bowman and Tripp Brower will run the investment bank, while Pelletier will run the software arm, which licenses software to investment firms and is attempting to create a marketplace for the trading of private stock.