Silicon Valley's In Crowd Just Lost BetterWorks, A $10 Million Startup
BetterWorks, a Santa Monica, Calif.-based startup with a who's-who of Silicon Valley behind it, just announced it's shutting down at the end of the month. — The company had raised $10 million from Redpoint Ventures …
Context & Ripple Effects
BetterWorks' shutdown lands three years into Silicon Valley's climb out of the downturn that threw a wrench into its wealth machine in late 2008 and forced firms into the layoff calculus trade outlets were charting in early 2009. The Santa Monica company — founded around creating more rewarding work environments, per its stated mission on record since late 2010 — had raised $10 million from Redpoint Ventures, enough brand-name backing that the shutdown drew same-day pickups from AllThingsD alongside Business Insider's report.
First-order effects
- Redpoint Ventures takes a full write-off on its $10 million position, and BetterWorks' staff become part of the same startup job losses the valley has been counting since the 2009 coverage.
Second-order effects
- Employers shopping for employee-recognition and rewards platforms lose a funded vendor mid-evaluation, consolidating demand among whatever competitors remain in that narrow niche.
Third-order effects
- If the pattern holds — prominent venture firms writing eight-figure checks into workplace-culture startups that cannot reach durable revenue — limited partners will press harder for traction evidence before follow-on rounds in this category.
The trend: Post-downturn venture capital is again chasing culture-and-perks startups on narrative rather than unit economics, and BetterWorks' failure is an early test of how quickly that appetite corrects.