Glowforge lays off more employees

More unfortunate news:

Glowforge lays off more employees after funding round falls through at 3D laser engraver maker – GeekWire

This announcement follows the bad news from December:

13 Likes

I do hope they find whatever form of funding is best and this isn’t a downward spiral.

17 Likes

Truthfully, this has me in a almost full blown panic. I really, really do not want to be left with a $7500.00 paperweight.

4 Likes

Brutal, best wishes to everyone involved.

(I should stop sending Dan resumes I guess.)

5 Likes

Do yourself a favor and take a couple of deep breaths. While I can never say never, the most likely worst case at this point is slower development.

7 Likes

Guess it depends on your skill set. If you have something badly needed…

5 Likes

I am not clear on this combination of terms.
Please expand.

Worst case: they cease operating and our web connected machines no longer function as intended.

Best case: this course correction works and GF comes back to thrive in the future.

I suspect most likely is not significantly different from the worst case.

Failing to raise funds is a bad sign. It means investor(s), who are shown the details of GF’s business situation , did not believe an acceptable return on their money was likely. Acceptable being better than alternatives in terms of risk and reward. It gets harder to raise funds thereafter.

so, lower the cash burn to extend the runway.
Does this cut buy them enough time to get to break even without the development that funding and these folks would have produced? One hopes.

If cash is tight, we may soon see higher subscription rates.

4 Likes

No, I’d never make a living as an author! I don’t see it as likely that they will just go dark. Could happen but we’re several years in so I’m thinking continue at a slower pace or maybe a less exciting sale.

I’m just guessing and hoping as 90% of everyone here understands corporate finance better than I do.

3 Likes

From the Geekwire interview…

Shapiro said revenue from the Aura and Glowforge’s other machines — the Plus and Pro — is enough to keep the company going.

Doesn’t seem dire, other than the staff directly involved, of course.

8 Likes

My guess would be that the funding they didn’t get was for expansion of another product. And that would be why they would have to layoff the staff working on that other product (or at least cut back the number of staff for said project).

I don’t think there is any fear for the company as it is today. They are simply trying to expand again (my guess).

5 Likes

I am sorry this is causing you such panic, but try to remain calm. The business decisions made by this company are beyond our control. From the beginning (2015) there has been concern regarding the “what if” factor of corporate failure. It has always been stated that steps would be taken to insure that the machines continued to function. You have been in the forum since 2019, so surely you have seen these concerns raised before and yet here we are in 2024, still forging away.

7 Likes

All comments have been fair and true. Layoffs have been very, very heavy in our area and I just had a moment.

7 Likes

I’m admittedly very out of my depth, but it seems like Glowforge was about to become a publicly traded company, and then for some reason that plan fell apart. I’m pretty sure this is the cancelled December funding the article is referencing.

The traditional route to an IPO requires a great deal of capital, time and attention – more than most small private businesses can handle, and Glowforge is a very small company headcount-wise.

An easier path is via an SPAC – a blank-check company is formed and funded by investors and publicly listed as a shell company, the target private company is acquired and merged with the shell company, the private company is now a publicly traded company.

Such a blank-check SPAC called Alpha Partners Technology Merger Corp was formed and signed an LOI to acquire Glowforge last July.

“Under the terms of the LOI, APTM and Glowforge would become a combined entity, with Glowforge’s existing equity holders rolling 100% of their equity into the combined public company. APTM expects to announce additional details regarding the proposed business combination upon the execution of a definitive merger agreement, which is expected in the fourth quarter of 2023.”

They backed out of the transaction in December. What that means for additional fundraising as a private company, I don’t know.

10 Likes

Tech sectors in general are being hit all over. I have a buddy who’s being laid off…about a third of the company is getting laid off…and the bosses/owners have stated they have to desire or intention to recruit more customers. And this is after about 10% had already been laid off. (Computer security)

So that may say more about the owners than the sector but his brother is down in the pentagon and he says it’s bad down there too.

2 Likes

just continues to make me happy i got out of the tech sector 20 years ago. architecture/engineering had one bad stretch back in the 2010ish range, but even then my company was profitable and kept our layoffs mostly minimal. as an ESOP (employee-owned company), i’ll get to see the full numbers for last year in a couple weeks when we have hte shareholder meeting, but i know that most of our business sectors surpassed their numbers, so i expect another good year.

9 Likes

NASA/JPL just announced over 500 layoffs as well. :cry:

1 Like

Nah, worst case is they are acquired by a private equity fund, they torture us customers for a few years (because that is what private equity does) and then they cease operations.

If a company has a good product and has real customers in the field, even if they are losing money they will probably be acquired by someone if they cannot raise new capital from investors. I like my machine; I think it’s a quality product. They have a consumables business in proofgrade, which is always attractive. They have the foundations for sticking around a while even if it’s as a subsidiary of a bigger company.

The negatives are that their market is hobby and small business. Michaels, Jo Ann Fabrics and Hobby Lobby show that the hobby/crafting market is a real market with real money. But it is not an app or piece of tech whose market is every living human being. And if you’re an investor, with interest rates much above zero, you want something you can exit in 5-7 years for a fat profit. For the last 15 years interest rates were at basically zero and you just wanted some money at some time in the future. Also, as an investor your choice is not between Glowforge and an AI sewing machine, it’s Glowforge and every other company wanting funds. Winter has come and as an owner I hope for the best.

6 Likes

Their future is dictated by their financials. The recent investment opportunities PROBABLY fell through because the investors did not like the risk/reward vs other opportunities.

Private equity seems unlikely to rush in as those folks use the same metrics to guide.

I lived through both a failed ipo and not being abe to attract needed capital. These things do not end well for the startup. It ends up looking like a fire sale.

Some business may emerge from this which keeps the profitable aspects of gf running. (If any can be found). Does the design store make a profit? Does the materials shop? Hardware? Retail partnerships?

One hopes that running the servers for a monthly fee is viable. That seems the likely end. (See insteon for an example of how a “free forever” server-based product became pay-to-play).

That end is not worst case. The worst case is paperweight city.

I would not buy a new gf at this point given the uncertainty. I am hesitant on a refirb to fix my currently broken machine.

edit (added probably to 2nd sentence as shop rightly pointed out, it was conjecture).

4 Likes

this is presumption. it may well be accurate, but “did not like the risk/reward” is not the only reason you might bail. there could have been issues on the investor end that caused them to back out. or, as you mentioned, another opportunity may have been better, which doesn’t necessarily mean that GF was a bad investment, just not as good as the other one. GF is notoriously tight-lipped about EVERYTHING, but even more especially $$. so it’s likely we’ll never know what the reason was.

wouldn’t blame you for not investing in a new machine right now, but i also wouldn’t presume/expect the worst case, just be prepared for it.

4 Likes

agree that my 2nd sentence was conjecture. edited to reflect your wise comment. thanks.

3 Likes