Whisper Board Members All Reportedly Step Down
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Whisper Board Members All Reportedly Step Down

Whisper Board Members All Reportedly Step Down

Anonymous social media app Whisper is facing a world of trouble from its board. In the last few months, two high profile board members have departed amid an effort by the founders to regain control.

Since becoming successful in Los Angeles around 2014, Whisper struggled to turn the attention of about 30 million monthly unnamed users into a significant revenue generator. The company recently received a $200 million valuation and more than $60 million in funding in its last round of investment. The investors included prominent Silicon Valley venture capital firms Sequoia, Lightspeed Venture Partners, and Shasta Ventures.

However, Sequoia’s Roelof Botha and John Hadl and Lightspeed’s Jeremy Liew recently vacated their board positions. Board observer Shasta’s Sean Flynn also stepped down from his position.

Board members and the co-founders are believed to have differing opinions and ideas regarding the company’s direction amid slowing user growth, according to sources. The company’s CEO Michael Heyward described Whisper as a media company that gathers and distributes user-generated content — all of it unattached to real names — across the Web.

In July, Whisper laid off 14 of its 71 employees, including its chief operating officer, in an effort to lower costs. With meager revenue, the company said it hopes to turn a quarterly profit by the end of the year.

Three sources familiar with the board upheaval say Whisper co-founders Michael Heyward and Brad Brooks have made attempts to orchestrate a buyout of early investors. Also unclear is whether the pair used their own funds or were joined by new investment firms to finance the buyout of venture capitalists.

Earlier this year, Whisper authorized the issuance of about $25.5 million worth of stock at a share price flat with its last fundraising in 2014, according to regulatory filings. Any buyers of those shares have the first crack at any proceeds from a sale, initial public offering or other form of liquidation.

State documents show Whisper has liens against it because of more than $1,200 in unpaid tax penalties and interest. It’s not unusual for start-ups to prioritize spending on product development over paying taxes when in a cash crunch. However, this has generated multiple points of concern among investors and board members.

Megha Shah
Megha Shah
A dreamer, traveler, aspiring entrepreneur and a bookworm beyond repair, Megha Shah is extremely fond of writing and has been doing so since she was a child. Apart from being a part-time writer, Megha is currently in college, pursuing B. Com. (Hons). Megha is an ardent follower of ‘Hardship, Hustle and Heart’ and firmly believes in the power of hard work and destiny!

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