Spark Capital And Bnter: A Troubled Romance

Lauren LetoThe following should serve as a poignant lesson about the pitfalls of the startup game. Spark Capital has a sterling reputation in the investment world. At the opposite end of the spectrum, Bnter is a great idea in full swing, silly with enough irreverence to attract interesting people. (Bnter was featured here in NY Tech Blog three months ago.) The courtship began in 2010 and continued well into March this year when all of a sudden, zip.

The relationship ended badly, to say the least. Long story short, Spark Capital already sent Bnter co-founder Lauren Leto a term sheet that was as good as signed, only for supposed ‘competitor’ Tumblr to complain that Spark was funding competition. It could only have ended badly and it did. Spark Capital never gave the expected cash injection. Bnter’s reputation was hurt and Spark Capital would rather not discuss this disappointing episode.

Of course, this might not be the whole story yet. Bnter looks interesting enough to enjoy some longevity and perhaps this is part of its growing pains. Entrepreneurs should heed the lessons of this tragic episode though. Without clear lines of communication across the board, last minute upsets can wreak havoc. As for Bnter, it’s best for them to live and learn.

Via: Techcrunch