24-26-turnaround 22/4/09 16:53 Page 24
CORPORATE RECOVERY
At crisis point
in association with
The turnaround industry is booming as more companies face financial problems.
Nick Britton talks to entrepreneurs and advisers on how it can take
more than cash to get a business back on track
T
he JCB Tough Phone made The vision was internet telephony (VoIP) It’s a position many entrepreneurs will
headlines last year as gadget over mobile phones – a prospect that be familiar with, though Sonim’s journey
reviewers lined up to put its excited Sonim’s venture capital (VC) from stardom to near-bankruptcy will be
“indestructible” tag to the test. In the investors so much that they invested $47 faster than most. Jamie Constable, CEO
name of science, the phones were dropped, million (£34 million) before the company of turnaround investment firm RCapital
pummelled, battered and crushed – and had made a sale. Sonim won awards and (which now owns Little Chef) says there’s
emerged still working. “a very steady flow of
What many people companies getting
reading those reviews
“Survival in this environment depends ‘not on how
themselves into serious
didn’t realise was that
well run you are, but on how you’re structured financially’”
financial trouble”.
the Silicon Valley- Survival in this
based company environment depends
behind the phones, Sonim, had been contracts but, critically, failed to deliver “not on how well run you are, but on
through a similar ordeal. working software on time to the mobile how you’re structured financially”.
“We became the pariah of the industry,” operators it had signed up. The hype quickly
says Bob Plaschke, Sonim’s CEO. “We spent turned to derision, and with a burn rate of LIMITED OPTIONS
millions of dollars [of investors’ money] $1.8 million a month it was only a matter of The Art Group, which supplies touch-
chasing a grand vision that wasn’t grounded time before Sonim ran out of cash with “no screen kiosks enabling visitors at art
in solving real people’s problems.” chance of any viable funding after that”. galleries to print off their favourite works,
24 Mergers & Acquisitions
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