David Carlick, president of the much ballyhooed start-up ad service PowerAgent, told Advertising Age that a meeting on the 15th with investors would determine whether the venture survives the week. The original group of funders, none of whom could be reached for comment, are hesitating to meet a planned third $20 million round of financing, Mr. Carlick said.
The news surprised many observers, coming only five weeks after the company's debut and a few weeks before the service is schedule to go live.
The online marketing industry has watched PowerAgent with interest both due to its executives' high-power reputations -- Mr. Carlick launched both DoubleClick and Poppe Tyson's interactive division -- and to see the fate of the company's risky 1:1 marketing model.
The company aims to register large numbers of consumers who seek commercial discounts on particular products, while delivering advertisers highly qualified sales leads. Since the company's Aug. 4 press debut, nearly 6,000 people have pre-registered, Mr. Carlick said. The service is scheduled to launch in October.
"If we don't obtain new funds Monday, we'll either have to drastically reduce the size of the company while we seek funding or potentially close the company," he said in a weekend interview.
PowerAgent employs 66, Mr. Carlick said, nearly half of whom are in sales. The company's biggest expense is paying external software developers to build the complex ad targeting system, he said.
"From the board's and the investors' point of view, the company missed [its] original ship date, which was going to be in June but was moved back to October," Mr. Carlick said. "That was an expensive delay. It cost several million dollars ..."
Mr. Carlick said he is hopeful for a last-minute offer today from an "angel" investor who entered negotiations after Mr. Carlick publicly appealed for help at a Silicon Valley investors conference last week.
Bill Bass, an analyst with Forrester Research, said it was a risky, if promising, idea all along. Soon after Mr. Carlick joined PowerAgent five months ago, he told Mr. Bass, "We're taking the 'Challenger Strategy': It will either be a spectacular success or a spectacular failure," Mr. Bass recalled.
"The concept is great," Mr. Bass said. "[But] it's not something you can bootstrap. It's [a] chicken and egg problem," he said, referring to the need to attract simultaneously enough consumers to appeal to marketers and enough marketers to satisfy consumers.
Copyright September 1997, Crain Communications Inc.