Zirtual failure

Zirtual

Dedicated virtual assistants for busy professionals

Description

Zirtual was an online agency that provided services for companies. The firm essentially worked as a matchmaker between busy entrepreneurs with small companies with efficient and ready to work virtual assistants (VA). The company was quite successful and at its height employed over 400 people based in the U.S, from 39 States. The Zirtual Assistants (ZAs, as they were called) took care of assigned administrative tasks, from scheduling meetings, answering emails, making arrangements for travel but also did research and were recruited to build social engagement.

Stats

Category
Software & Hardware
Country
United States
Started in
2011
Closed in
2015
Number of Founders
3
Name of Founders
Collin Vine, Erik Jensen, Maren Kate Donovan
Number of Employees
101-250
Number of Funding Rounds
4
Total Funding Amount
$5.5M
Number of Investors
10

Cause of Failure

Zirtual was a successful and highly on demand service. What brought the firm on the verge of bankruptcy was its management and the high burn rate it had.

Scaling too soon, with 500 employees on the payroll when the company has not yet celebrated its 5th anniversary, usually gives way to an unsustainable business. Zirtual’s co-founder and CEO had failed to calculate the stats and figures of its business, although she states that it was the accounting firm they had contracted that gave them the wrong numbers. When a supposedly agreed upon round of funds didn’t come through, Zirtual shut down overnight. Within days of Zirtual closing, came news that the CEO of the company Startups - a platform helping new entrepreneurs and small businesses take off -  offered to purchase Zirtual. The deal took place and Zirtual, with all of its assets, and a percentage of its employees became the property of Startups.co.

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