Mattermark, the site for startup and company data, is shutting down its own business after selling in a disappointing outcome to FullContact.
In a document obtained by TechCrunch, co-founder and CEO Danielle Morrill wrote that “common stockholders will not be receiving anything in this deal.” In other words, Mattermark employee shares are worthless.
It was just last year that Mattermark raised a $7.3 million Series B. Since it was founded in 2012, the business raised over $17 million from high-profile investors like Andreessen Horowitz, NEA, 500 Startups, Foundry Group and Sherpa Capital. Foundry and 500 Startups are also investors in FullContact.
The letter says that “the consideration for the purchase of the company did not clear the preference of preferred shareholders.” This means that the VCs aren’t necessarily getting all their money back, either.
Unfortunately, as Mattermark data will show you, running a startup is tough. We’re told that it was hard to convince people to pay for the business intel in a competitive landscape that includes Crunchbase, PitchBook and CB Insights.
Here’s the text from the letter sent to common shareholders.
“Dear Mattermark Common Shareholders,
I’m reaching out to share some great news: Mattermark is being acquired by FullContact! We are happy to have found an exit for our shareholders, and are working hard to close this deal immediately. Your help is kindly requested to keep an eye out for docs in Doscusign so we can get your signature today.
This is a private stock transaction, and unfortunately the consideration for the purchase of the company did not clear the preference of Preferred shareholders so Common stockholders will not be receiving anything in this deal (cash or stock). Though this is not the outcome we all dreamed of when we embarked on this journey nearly 6 years ago, we are super grateful to have worked with you to organize the world’s business information and would appreciate your signature so we can get the majority of common holder signatures needed to close this deal today.”
The source who sent the document said there was also an email that discussed a less than $500,000 cash consideration from FullContact, which “will be used to facilitate shutdown.” The deal additionally included a stock transaction.
Mattermark was based in San Francisco. FullContact is in Denver. We’ve reached out to the companies for comment.
Danielle Morrill co-founded Mattermark with her husband Kevin Morrill, who served as company CTO. Danielle previously worked at Twilio and described herself on LinkedIn as its “first employee.” She also has been a “scout” for Sequoia Capital, helping them find early-stage startups to invest in.