Seattle startup Round, which initially seemed to be on the path to success after a $12 million Series A investment, recently announced its shutdown. The company’s community-based platform, designed to connect tech leaders, experienced rapid growth and reached $1 million in annual recurring revenue. However, the tech downturn and subsequent layoffs in 2022 impacted Round’s business model, which relied on individual annual membership fees paid by employers. Despite pivoting its business model multiple times, Round was unable to achieve the growth it had initially aimed for and struggled to secure further investment in a tightened venture capital market.
Round CEO and co-founder Ryan Fuller acknowledged that raising venture capital may have accelerated the company’s downfall. Fuller, a former Microsoft executive, highlighted the challenges of scaling a community-based business backed by venture capital, as the need to grow a user base while maintaining special connections between members and accelerating revenue was difficult. Additionally, the lack of community in society was seen as a contributing factor to Round’s shutdown, with Fuller emphasizing the need for people to come together rather than move apart.
Fuller expressed gratitude towards Round’s investors, such as FUSE and Primary Ventures, for their support throughout the company’s journey. However, he acknowledged that being more prepared for macroeconomic fluctuations and potentially adopting a more bootstrapped approach could have altered the outcome for Round. While Fuller does not regret raising venture capital, he reflected on the challenges that arose due to the company’s high-growth expectations and the changing market conditions that impacted its ability to sustain momentum.
As Round prepares to wind down its operations, Fuller expressed hope that the community formed through the platform will continue to provide value to its members. Despite the difficulties faced by the Round team in recent months, including the closure of the company and the loss of around 11 employees, there is a sense of appreciation for the support and connections that were fostered during its existence. Some members are exploring the possibility of maintaining their connections through a Slack group, indicating a desire to carry on the positive impact that Round aimed to achieve, even in the absence of a venture-backed business model.
