what's going on at Telesym?

Filed in archive Venture Capital on January 4, 2004

Telesym, one of the most promising start ups in the VoIP space has trouble in selecting the right executives.

"Chief Executive Raju Gulabani, who co-founded the company in May 2000 with Karl Denninghoff, was fired after the board concluded that a more experienced leader was needed. Denninghoff, the chief technology officer, who invented the company's voice over Wi-Fi software, was let go when he attempted to defend Gulabani. Both resigned from the board.

"Letting us both go like this was insane. It was stupid," said Denninghoff, whose stake in the company has been reduced to less than 1 percent. "But this is life in VC world. This is the way it works."

I couldn't crosscheck the information yet. According to the article both founders were ousted in order to change leadership and reduce stakes of the founders after the recent investments from Intel and Siemens VC. Usually it's only an option you pull if the company is about to hit a wall, but apparently the company just secured with the latest funding more time to market the excellent product.

Dennighoff concludes sadly:

"Nothing is ever so bad that you can't make it worse by taking VC money," said Denninghoff, who is considering starting a new company. "I wouldn't take a VC dollar unless it was a gift, which has a snowball's chance in hell of happening."