August 13, 2015 0 Comments
After a long struggle to raise funds and make the math work, Zirtual, the Las Vegas-based virtual assistant service recently announced that it’s shutting down and has laid off its 400 employees. Today, Zirtual has been remarkably saved by one of its customers, Startups.co, a startups launch platform based in Powell, Ohio. According to reports, Startups.co has assured all Zirtual customers and employees that the company will resume operations on the 17th of August. So what caused Zirtual’s collapse? Zirtual grew too fast and failed to raise the much-needed funds to keep the business afloat. By converting its workers from being independent contractors to full-time employees with benefits, Zirtual’s costs skyrocketed, adding additional costs it could not sustain. Although the news of startups closing shop is nothing new in the industry, Zirtual’s crisis should serve as a lesson for other startups that revenue will not mean anything if the company cannot manage its burn rate.
You can read about Zirtual’s acquisition here.
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