As of May 1, 2019, we’ve decided to shut the doors on Bax.

 

As we’re believers in radical transparency, I’d like to tell you a bit about why we made this decision.

After over a decade starting, building and selling startups, I realized how painful startup fundraising was. Bax was meant to help solve that problem with great technology, bulletproof processes, and experienced mentors.

After several successful tests in the market, we officially launched Bax in early Q1 of 2018. We forged partnerships immediately to ensure we were operating legally in the eyes of FINRA and the SEC.  We started working with clients, and we helped many of them succeed, but startup fundraising is a fickle beast, and we couldn’t get every client across the finish line. However, even some of the clients who didn’t close their round through Bax let the world know about the great experience they had with us.

After building a bit of momentum, we got an acquisition offer in July of 2018. It was for far more than the company was likely worth at the time, and the opportunities that came with it seemed incredibly lucrative. The team huddled up, and we made the decision to pull the trigger. We were going to be acquired. This wasn’t the first time I had sold a company. In fact, I had sold several – so I had a good idea of what to look for. All the boxes were checked, and things felt right.

The buyer expressed that after the deal was done, they wanted to take the company in a different direction. While we loved what we were doing, we felt the direction they wanted to go in also seemed interesting. After strategizing with the buyer, we all felt the best way forward would be to shut down our normal day to day operations, and begin preparing for what was to come after the deal was done.  They projected it would take about a month, and we received written confirmation their board of directors had approved the acquisition.

After two months, we started to get a bit worried. After three months, and then four, we were panicking. Then the buyer gave us some bad news. They decided to embark on a joint venture with a larger global firm to acquire us, and while their own board had approved us, their new partner’s board did not.

Before we could be too disappointed, they let us know that they still planned to make the same deal, just in a different way. But it would take time. We wanted to believe, so we kept at it.

Then another month went by. Then another. Christmas hit, and their team went dark for the holidays. Then another month went by. We had all but given up on the deal, and begun discussing how to handle things.

In February of 2019, we got a call. The buyer was ready to make the deal, and we got new paperwork drafted. We began to celebrate. The wait was over, and we could finally move forward.

During that process, we found that the buyer added a strange line item to the deal. They wanted to send funds from a foreign country in a very unconventional method. After repeated pushback from our end, we found they were unwilling to finalize the transaction unless we could accept funds in the way they wanted to send them.

We consulted several attorneys, spoke with a dozen banks, and hired two consultants who really knew their stuff. All of them said the same thing. There’s no way to make this happen in a way that would be considered “clean”.

After some agonizing over what to do for a week, we made the decision internally to back out of the deal.

We had shut down our day to day business months ago, much to the behest of some of our clients and partners at the time. I had personally invested a substantial sum of my own money into Bax, so I fought the decision to pack up shop for as long as I could.

After all this, we were burnt out. I was burnt out. My cofounders were burnt out. Our employees were burnt out. So after marinating on it for a few weeks, weighing pros and cons, and working with team members to find them soft landing spots, we’ve decided to shut the doors on Bax to focus on other projects.

It was a fun and fascinating journey (albeit a short one). It’s tempting to think about what may have happened had we turned down the acquisition, or to second guess ourselves in various ways. However, after speaking with several of our brilliant advisors and our whole team, all of them resoundingly said that it seemed to be the right move at the time given the information we had.

If you were a partner or a client of ours at any point and you have any further questions, please reach out to me personally at info@travissteffen.com. I’d be happy to chat.

Sincerely,

Travis, Peter, Morgan and the Bax team.