Troubled social network, Capazoo, sent most of its workforce home as it awaits the outcome of an ongoing legal dispute between its founders. The Montreal-based startup sent 60 staff home this week in what it claims is a “temporary suspension”, says the Montreal Gazette. However, Capazoo general manager, Robert Samuels, is quoted as saying “the money dried up”, and various press reports about the business “fed the fire”. A “to let” sign has reportedly been placed in the window of the firm’s headquarters.
The legal dispute is between brothers Michel and Luc Verville, who founded the company. Michel has asked the Quebec Superior Court to intervene and install a management team of his choosing, alleging that he was ousted from the firm by Luc. “Future investors are not willing to invest until the situation between Michel and the company is resolved,” says a spokesman for Luc Verville.
Capazoo launched in Oct as a social network designed to compete with the likes of Facebook. It received USD25m funding and comedy brand National Lampoon acquired an undisclosed equity stake in the firm. The site claims to be the first social network to have its own member-driven economy. Users gain points for inviting friends and adding content to the site. However, these can only be redeemed as cash if users buy into one of Capazoo’s two premium membership packages which cost USD24.95 and USD34.95.