Look at this crazy cap table – Nearly 400 investors backed Vicis before high-tech helmet maker folded

December 31, 2019
Taylor Soper-GeekWire

Raising money and managing investors can be a major undertaking for any startup, but for failed Seattle startup Vicis, the complexity was on a whole other level.

The high-tech football helmet maker lists an extraordinary 389 investors on its capitalization table, or “cap table” as it’s commonly known in the business world. The list, never before made public, spans nearly eight pages in King County Superior Court documents unearthed by GeekWire.

Vicis was placed into receivership last week by its board after running out of cash.

The list includes current and former sports legends such as Aaron Rodgers and Doug Baldwin; pro team franchise owners; medical experts; and a bevy of respected Seattle-area business leaders including ex-Concur CEO Steve Singh, biotech venture capitalist Robert Nelsen, and Montlake Capital founder Arthur Buerk.

But what stands out even more is the sheer size of the cap table.

Experts in startup financing say they’ve never seen anything like it, and speculate that the complexity may have contributed to the company’s challenges.

Vicis raised more than $85 million after spinning out of the University of Washington in 2014. The number of investors isn’t a surprise, but the cap table shows that the majority of the backers are individual entities, with few institutional firms and no single shareholder owning more than 7 percent of the company. It’s more common for a startup to have a handful of investors, with a small number holding a controlling stake.

“For the startups that I’ve been involved in, it’s very unusual to have this number of investors,” said Lachlan Huck, an attorney with Seattle-based firm Focal PLLC who is not involved in the Vicis case.

The strategy can create potential challenges beyond communications and other logistics. When so many shareholders are involved, “no one investor may feel compelled to help the company if it runs into trouble,” The New York Times wrote in 2015.

Having hundreds of investors can also complicate big decisions that require a majority vote.

GeekWire has contacted a Vicis representative, and the appointed receiver, Eric Orse of Orse & Co., about these issues, and we will update this post if we hear back.

According to the cap table, Vicis’ largest shareholder is Cincinnati Reds minority owner Harry Fath, who owns 6.81 percent of fully diluted shares as part of the Fath Holding Trust.

Next on the list is Per Reinhall, the University of Washington engineering professor and co-founder who owns 5.06 percent.

The third-largest shareholder is a trust in the name of Charlene Marver, which owns 4.56 percent. Charlene Marver worked at Vicis and is the wife of co-founder Dave Marver, who stepped down as CEO in November. Dave Marver is listed as an individual shareholder and owns 2.36 percent of the company.

When contacted by GeekWire this week, Dave Marver declined to go into detail about individual shareholders but said around one-third of Vicis shareholders are his friends, family, or part of their extended network.

Sam Browd, another co-founder who is the medical director of Seattle Children’s Hospital Sports Concussion Program, owns 3.46 percent.

Seattle-area institutional investors include The W Fund LP, with 1.77 percent; Trilogy Equity Partners LLC, with 0.45 percent; and the Washington Research Foundation, with 0.45 percent.

The University of Washington is listed as the 14th-largest stakeholder, at 1.07 percent.
Vicis also raised money from several sports stars. Rx3 Ventures L.P., the venture capital firm co-founded by Rodgers, the two-time NFL MVP, is the 27th-largest shareholder, with a 0.571 percent stake. NFL Hall of Fame quarterback Roger Staubach owns 0.469 percent.

Baldwin, the former Seattle Seahawks wide receiver, has a 0.163 percent stake. Baldwin was in the room during a Nov. 26 webinar for investors, and expressed concern that investors weren’t kept fully up to speed on the company’s financial situation in a timely manner.

“Obviously, all of us are pissed to be in this situation,” Baldwin said on the call. “I think all of us would have put in more work and more due diligence to make sure that we weren’t in this predicament as we are standing right now.”

Seattle Seahawks linebacker Bobby Wagner (0.0187 percent) and former linebacker Cliff Avril (0.0173 percent) own small amounts of shares. Harrison Wilson IV (0.021 percent), the brother of Seahawks quarterback Russell Wilson, is on the list as well. Vicis previously said that Russell Wilson was an investor. Wagner, Wilson, Baldwin, and others were part of the Vicis “coalition,” which it described as “a movement of moms, dads, brothers, sisters, players, coaches, doctors, and others who care deeply and want to make a difference in the lives of young athletes.”

Other well-known investors from the Seattle region on the list include:

• Mike Halperin (0.390 percent), co-chair of the UW’s $5.9 billion Be Boundless fundraising campaign;
• Singh Family, LLC (0.186 percent), led by former Concur CEO Steve Singh;
• Robert Nelsen of Arch Venture Partners (0.161 percent);
• Linden Rhoads (0.034 percent), general manager at The W Fund.
• Las Vegas Knights minority owner and new Sounders FC executive Peter Tomozawa (0.151 percent);
• Strix Leviathan CEO and veteran Seattle entrepreneur Jesse Proudman (0.138 percent);
• Montlake Capital founder Arthur Buerk (0.121 percent);

Vicis laid off more than 100 employees earlier this month. The company can still be acquired out of receivership. Its primary assets, according to Vicis Board Chairman Bruce Montgomery, include all of Vicis’ current products, a new football helmet design, the youth football helmet, a soft helmet for 7-on-7 football and rugby, a hockey helmet, and a potential DoD contract for Army helmet liners.

Correction: Seattle-area angel investor Charles Fitzgerald says he is not the person of that name listed on the cap table. We’ve updated the story to reflect this.

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