Factorli, the 3D printing startup funded by Tony Hsieh’s VegasTechFund has closed its doors.
According to an announcement on the company’s website:
As of last week, Jen McCabe is no longer CEO of Factorli. As a part of this change she will no longer manage hardware investments for VegasTechFund. Jen’s vision for removing complexity from the hardware development industry was ambitious and we look forward to seeing her achieve great things in the future.
Sources close to the company tell me that the decision to close was made by the board, which comprised two representatives of VegasTechFund and McCabe herself. The problem, I’m told, was one of scale: After raising $10m, it had become clear that McCabe’s ambitions for the company were far greater than she had originally pitched investors, meaning that a lot more capital would be required in the long term to allow the company to scale.
The decision to close a VegasTechFund company due to over-ambition is beyond ironic. As I’ve written before, Hsieh’s plans to regenerate downtown Vegas are cursed by over promising, often from Hsieh himself. My previous company, NSFWCORP (now part of Pando), was based in downtown Vegas and both NSFWCORP and Pando received investment from Hsieh and VTF. During my time in Vegas, I recall three separate occasions when Hsieh told me that Vegas was going to be the world capital of [x industry].
First it was boasted that Vegas would become the “Co-Working Capital of the World,” hiring co-working expert Jennifer Magnolfi to build out multiple co-working spaces across the city. Despite being popular with local entrepreneurs, sources tell me Magnolfi was forced out after the Downtown Project constantly shifted the goalposts for the project.
[Update: Lee writes to tell me the "Writing Capital" plan hasn't crumbled: "Writing nexus is still bubbling. In fact award-winning @juliangough is now first writer-in-residence... You can use another verb. "Slowed", "delayed." Whatever."]
And then Vegas would be — Hsieh told me — the “3D Printing Capital of the World” with Factorli acting as a place for rapid prototyping of product ideas and Jen McCabe acting as the go-to person for Hsieh’s hardware investments. (Eagle-eyed readers will note that all of Hsieh’s “X Capital of the World” projects was headed by someone called Jen or Jennifer. That’s probably a coincidence.)
While it’s perfectly logical for investors to avoid being stuck funding a company that will need far, far too much money to scale, it’s beyond ironic that Vegas Tech Fund has shown McCabe the door for over-promising on the potential of her company.
I wonder where she learned that from.