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What happens as you approach the end of your runway? It is a scenario that no startup founder wants to find themselves in.
Ben “FishStix” Goldhaber and Chris “ChanManV” Chan started Juked in 2019 with the goal of building an inclusive community platform for esports fans. Juk was originally launched as a web-based platform. However, it really gained traction in early 2022 when the app launched on iOS and Android. Through Julynearly 16,000 esports fans used the app.
Knowing it would require additional capital to fund further development, Juked began pitching investors for a multi-million dollar starting round.
And then the world destabilized. Stock and crypto markets fell. The war in Ukraine continued. The Fed raised interest rates. As uncertainty mounted, investors changed the way they evaluated early-stage prospects.
“In the end, our metrics were only ‘good’ and not ‘great’ in a fundraising environment where only the very best companies were funded. The end result is that unfortunately we were unable to convince VCs to support Juked,” explains Goldhaber.
In an investment environment that tends toward fewer, higher-value mergers and acquisitions, more startup founders will be in the same position as Goldhaber and Chan.
While the team could have kept quiet about their predicament, Juked’s community management strategy focused on transparency. On September 24, Goldhaber posted a now viral blog detailing Juk’s situation to the community and investors. If the company couldn’t find a buyer by October 7, the app would have to close.
The blog post itself invited interested buyers to pitch. For Goldhaber, Juked has a clear appeal to a buyer who wants to connect with the esports audience and take direct ownership of those relationships. Most esports companies rely on social media platforms – Twitter, Twitch, YouTube, Reddit, Discord, and more – to reach fans that come at a disadvantage.
“You are truly obligated to a third party when it comes to understanding and reaching out to your users. You don’t own the data and you have to appease the almighty algorithms to get your message across. Juked solves that,” Goldhaber said.
Juked also looks at legacy media companies struggling to connect with Gen Z.
So Juked’s pitch worked? Since their announcement, the team has confirmed that it has been overwhelmed by the number of incoming leads. “I have trouble keeping up with everything!” Goldhaber joked.
In the end, Juked bet that their vibrant community and their product would garner the support of fans and industry professionals. It’s a bet they probably won.
Other fledgling founders should keep this in mind. While not every product will be as community oriented as Juked, this case shows that not covering up the truth can’t be the best option. The audience that Juk cultivated through their transparency probably saved the company.
For now, Juked’s plan is to collect as many offers as possible between now and October 7 to find the best prospects for their community.
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