What the heck happened at Zirtual?
That’s the question that employees and investors are asking about the virtual assistant startup, which had just under 400 employees.
Zirtual, which launched in 2011, shut down abruptly on Monday. At 1:34 a.m. on Monday, CEO and founder Maren Kate Donovan sent an email with the news.
“This is the hardest thing we’ve ever had to do, and we’ve been fighting and crying, trying to make it not so. However, due to a myriad of reasons, Zirtual can no longer afford to operate,” wrote Donovan.
In bold, the email stated Zirtual was ceasing all operations. “This also means that our last day of employment was Friday, August 7th, 2015,” the email read.
Friday is the same day that Donovan appeared on Jason Calacanis’ podcast, This Week in Startups. Donovan spoke optimistically about the company and its plans for global expansion. There was not even the slightest mention that the company was struggling.
Calcanis, an angel investor who participated in Uber’s first round of funding, was a recent investor in Zirtual. He tweeted that he was among the “smallest investor[s]” in the company. Zirtual had raised $5.5 million in funding, according to Crunchbase.
Calcanis took to Twitter to show his shock on Monday.
On Tuesday, he tweeted:
VegasTechFund and Tony Hsieh were also early investors in the company.
“Zirtual was a great idea and we are proud of our early investment in the vision,” Zach Ware, a partner at VegasTechFund, said in an e-mail. “While they had a small group in Las Vegas, we were many degrees removed from their day-to-day operations.”
Zirtual had been on a hiring spree recently. It announced in March that it would be filling 100 new jobs on the West Coast. One employee, Daniell Wells, thought this was odd.
“It’s pretty common knowledge that most of the Zirtual employees were scrambling around for work on a daily basis,” she told CNNMoney.
Zirtual’s base offering was 16 hours of assistance a month for $399. The virtual assistants helped with things like managing customers’ calendars, booking travel, proofreading, making online purchases and doing research.
Wells had been working 40 hours a week, earning $11 an hour and full benefits. since February.
She said Zirtual had been cracking down on overtime recently.
“If an employee was even five minutes over, they would send an email saying they’re on a watch list,” she said.
Aside from the initial email, there has been little communication from management since the announcement.
“When 400 people are left out in the dark instantly, that’s a big issue,” said Jared (who asked that his last name be kept private). “There’s very little excuse for that … My main frustration is the way this was handled. It was incredibly unprofessional.”
Zirtual’s Facebook and Twitter pages have since been pulled.
Co-founder Erik Jensen apologized to employees in an internal chat viewed by CNNMoney.
“sorry for being so distant right now,” he wrote. “…as soon as i have the bandwidth to talk, i promise i will.”
When someone commented, “Hope you are keeping your head up.” Jensen replied, “it’s been devastating.”
In an email to CNNMoney, Donovan wrote, “All ZAs will be paid for the time worked, and we are deeply sorry for having to shut down so suddenly do to an un-forseen funding fall through.”
She did not address what would happen to Zirtual customers.
“Clients have not been refunded and there is no talk of it ever happening,” said Wells. “I have a client who prepaid for the entire year, she’s out over $5,000.”