Organic Avenue’s Bankruptcy: When Investment Capital Replaces The Founder’s Passion
Last week, Organic Avenue — one of the earliest companies to jump on the juicing bandwagon — announced it was shutting down all ten of its retail stores and filing for Chapter 7 bankruptcy protection. The Organic Avenue story is just the most recent example of an oft-told tale: what happens when corporate executives or large sums of capital replace a founder’s passion.
Serial entrepreneur Doug Evans launched Organic Avenue fifteen years ago with partner Denise Mari out of Mari’s Lower East Side apartment. In 2013, Mari and Evans sold Organic Avenue to investment firm Weld North, who hired a former Pret A Manger executive to oversee operations. The new operators opened stores, expanded lunch options, and began shipping nationwide. Unfortunately, these initiatives didn’t work as planned, and by January of this year the writing was on the wall when the company warned that it would lay off 38 employees from its kitchen in Long Island City, Queens. Around the time of the layoffs, the CEO who was expected to revive the brand also left the company.
I met Organic Avenue founder Doug Evans in 2009 when he contacted me with a business proposition. Evans wanted to use my company’s infrastructure and enterprise software to begin delivering Organic Avenue juices locally in New York and the surrounding areas. Unfortunately, I was bogged down with growing my company, The Fresh Diet, so I passed on the offer, a decision that proved wrong and costly. Evans continued building his brand until he sold it for somewhere in the $30 million dollar range. But Evans didn’t stop there: earlier this year, Business Insider reported that Juicero, Evans’s next startup, has raised $20 million with another $100 million on the way.
While Doug Evans has been building his next startup and doing what entrepreneurs do best — innovating and creating — last week’s news shows that Organic Avenue’s new owners have been doing the opposite, as is often the case when founders are bought out or pushed out. In many cases, years or months, after a startup is bought out, the company is closed.
Others think they can do it better, but the truth is that no one knows your business like you do. Founders are the heart of any small business. Their passion keeps the lights on, and corporate executives or large sums of capital can never replace the blood, sweat, tears that founders put into their startups.
While some will say that Organic Avenue fell victim to the slew of new competitors entering the juice market, or to high rents and a tough retail business model, I say the business died because its heart was ripped out. I believe the heart, the founders, would have found a way to keep the lights on, a way to keep the payroll flowing and the jobs coming.
I’m tired of hearing the same story over and over, from Dov Charney and American Apparel to David Schottenstein and Astor and Black and many others in between. Entrepreneurs and founders find a way to keep going where others don’t. It’s like your mother always told you, no one can take care of your stuff like you can. If you’re going to let someone else use your things, you best keep a watchful eye on them.