O2 Shifts Focus After Investor Issues: “So now, once again O2 is doing the hard thing”
O2, the hydration company co-founded by Dave Colina, has encountered a hurdle in its fundraising campaign. Its lead investor has pulled out after the scheduled close date of the Series B fundraising campaign.
The details: Colina provided the news near the end of October in an investor update. He explained that O2 had reached the minimum on its $7 million Series B fundraising campaign, which put the company on pace to close in September.
- The investor pulled out on October 8, four months after signing a term sheet with O2. The reasoning provided by the investor listed a downturn in capital markets, as well as the approach to the Series A campaign that ended on April 8.
- This sudden change by the now-former lead investor left O2 with around $3.5 million in investor dollars, which the company will “smartly leverage” while preventing other people from derailing its progress.
Major costs: As Colina explained, there were significant costs for O2 as the company focused on securing this lead investor. The legal fees alone were major, and now they are on O2’s books as the company shifts its focus to a new path forward.
“These guys aren’t chuckleheads from Ajax Investing – this is a prominent multinational investment firm that signed a term sheet,” Colina said in an O2 blog about the sudden departure. “Kind of a big deal, and we racked up big $$$ in legal fees getting it to the one-yard line, only for them to bail at the last minute for no good reason.
“So now, once again O2 is doing the hard thing: changing plans, refocusing efforts, surviving, and ultimately thriving – because that’s what we do. As Tosh [Brian Chontosh] says, ‘Hard people do hard sh*t.’”
Where does O2 go from here? There are multiple options. Colina noted that the board is hard at work trying to find another lead investor that can fill the gap left by the sudden departure.
- If they are unable to achieve this goal, O2 will close out the Series B campaign at a lesser amount and revise the strategy for growing the business.
- Colina and the board of directors have concluded that there is still a “tremendous amount of upside” in O2’s business, which will become available to any other investor that joins the fold.
Another round: The Series B campaign is the second that O2 has launched in the past calendar year. The hydration company capped off 2021 by launching a Series A crowdfunding campaign on SeedInvest.
- According to the SeedInvest site, O2 raised $1,592,282.46 during its Series A crowdfunding campaign.
One of the prominent figures that took part in the initial campaign was Joe De Sena, the founder of Spartan Race. He joined in March, weeks prior to the end of the Series A campaign.