With large storage vendors – and other corporations – laying off and struggling these days, where does that leave the little guys? Today’s economy doesn’t bode well for startups that rely on venture funding to survive.
Take Copan Systems for example. At the start of 2008, Copan CEO Mark Ward talked about taking the MAID systems vendor public this year. As 2009 approaches, Copan’s survival depends on it securing another funding round. While waiting for funding, the company has laid off a big chunk of its staff, cut the pay of its top execs, and will give many of the surviving workers unpaid time off.
Ward says he fully expects to get funding from new and existing VCs, but the Copan board suggested moves to cut costs.
“My board members said ‘Why aren’t you doing the same thing that Sun, HP and Dell are doing?’” Ward said, referring to companies who have announced layoffs and unpaid leave over the holidays.
Copan slashed 15% of its staff with almost all of the cuts coming in sales and marketing, Ward said. The CEO and other senior management members have taken pay cuts, which other industry sources say come to 20 percent for Ward and 10 percent for others. “It was a voluntary pay cut and I’ve taken more than everybody else,” Ward said.
Over the next two weeks, Ward said about half the employees – those not involved in new product development – will take an unpaid leave.
Ward says much of the sales slack will be picked up by a worldwide reseller deal with a large partner he hopes to name in a few weeks. According to Ward, Copan signed a multi-million federal government order last quarter and sales are going well. “We have 175 customers, and a path to profitability in 2009,” he said.
That’s providing it gets the funding to make it into 2009.