After losing out on a high-profile investment and enduring a dispute between its founders that led to a lawsuit and an out-of-court settlement, an Ottawa company is warning aspiring entrepreneurs to make sure their business plans are sound to avoid similar setbacks.
The entrepreneurs behind Wipebook, an erasable notebook, first made headlines in late 2013 when their Kickstarter campaign went viral and raised more than $420,000 to develop and distribute the product.
That notoriety helped land Frank Bouchard, Toby Maurice, and Thomas Sychterz a spot on the popular CBC Television show Dragon's Den last April, where renowned venture capitalist Arlene Dickinson offered them $300,000 for a 25 per cent stake in the business.
But a year later, that deal is off the table, and Sychterz is out of the picture.
'It really would have been a game-changer'
"It's pretty disappointing and frustrating, because I think it really would have been a game-changer for Wipebook," said Maurice, outside the company office in the ByWard Market. "I think it would have accelerated us."
Wipebook founders Thomas Sychterz, Toby Maurice, and Frank Bouchard appeared on the CBC-TV show Dragon's Den in April 2015. (CBC)
Trouble began months before the episode aired, when Sychterz, who's based in Montreal, filed a lawsuit against Maurice and Bouchard for his stake in the company.
Sychterz says "different visions" led to the rift, while Maurice blames it on what he calls "synergy issues."
They settled out of court last August, with Sychterz getting an undisclosed amount of future Wipebook revenues.
'Get your stuff in order,' Dragon advised
But the settlement came too late for Dickinson, who withdrew her investment, according to the remaining founders.
"She pretty much said, 'Guys, get your stuff in order,'" said Bouchard. Wipebook lacked a shareholder's agreement, which should have defined what the co-founders were allocated in terms of ownership, he added.
Wipebook's original Kickstarter campaign in late 2013 raised more than $420,000 for development and distribution. (Waubgeshig Rice/CBC)
"We didn't have our governance. We were so busy trying to fulfill our initial Kickstarter across 68 countries around the world that the governance and all our shareholder stuff was kind of left up in the air.
"We didn't really have a clear understanding of what were the expectations between the co-founders, what was everybody going to get if we were going to pursue as a team, what was going to happen if we were going to break apart," said Bouchard.
Despite the setbacks, the company is moving forward with new products like the Wipebook Pro, a smaller, more sophisticated notepad, and larger flip boards for school settings.
Lessons learned
Sychterz, who's since developed a new web platform for businesses called LaunchLeap, said he holds no ill will towards his former partners.
"It's difficult when you have to part ways with people that you've spent so much time putting so much blood and sweat into a project," he said. "But I wish them all the best, and I think the product's going to do great."
The Wipebook is an erasable notebook that's like a combination between a whiteboard and a paper notebook. (Waubgeshig Rice/CBC)
Maurice and Bouchard both call this saga an important lesson, and they hope other fledgling businesses can learn from it.
"Make sure at the end of the day that you have your structure and governance in order, and just a vision of where your company is in order, because it's important, really important," said Maurice.
"We're still in business after this rollercoaster ride," said Bouchard. "But we're pretty excited to see what Wipebook has in store for the next year."
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