Ailing Danish venture capital firm 2M Invest has lain off its entire staff and had its management agreement with Menire Corporation terminated. In January last year 2M Invest acquired Menire Advisors, which manages two funds, Menire Corporation and Macceleration. The personnel of Menire Advisors will continue to be available to Menire Corporation.
Menire has also paid EURO562,500 to acquire half of a EURO3 million convertible loan it made to 2M Invest in April 2001. This deal results in a EURO950,000 profit for Menire, with an option to acquire the other half on the same terms. The two companies have just one mutual investment, Hantro, a wireless multimedia company based in Finland.
These moves follow the collapse of 2M Invest’s talks with an unnamed international venture capital fund aimed at establishing a strategic alliance. The agreement would have guaranteed a future capital increase of DKK150 million, to take place as a rights issue, and a further injection of existing rights.
2M Invest had also started discussions with a bank consortium for bridge financing to cover the period until the rights issue. According to 2M Invest the negotiations were more complex than expected and broke down over the validity of the guarantee and whether the fund would participate in the bridge financing.
2M Invest said it had considered a number of other solutions but these processes were too lengthy to make the debt that would have been incurred by paying the employees salaries in the mean time worthwhile. The company has now suspended negotiations with the VC and is working on presenting the bank consortium with a restructuring programme.
2M Invest was founded in September 1992 and was listed on the Copenhagen Stock Exchange in February 2000. It has offices in San Francisco, Helsinki, Stockholm, Taipei in Taiwan, as well as Hellerup, Denmark. The company employed around 40 staff. At the end of last year the company formed a strategic alliance with Danish fund, Growth.dk, now known as PreVenture.
Colin Rutherford, executive chairman of Intelli Partners Limited, resigned from the company’s board in June, after only two months with 2M Invest.