Godard Abel's company G2 built a $1 million staircase, similar to the one pictured here, in the months before it laid off 10% of its staff and applied for a PPP loan.This story is available exclusively on Business Insider Prime.Chicago-based software review company G2 raised $100 million in venture capital and had big growth ambitions. It spent like a well-funded company, undergoing a $6 million office renovation and purchasing a domain name reportedly once valued at $1 million.
The stairwell, elegant but formidable, was built in 2019 and signaled that G2's scrappier early days were past. It cost $1 million of a $6 million renovation budget to build. As the coronavirus was tanking the US economy, the company applied for and received a small business loan as part of the federal Paycheck Protection Program to cover some of its payroll costs. The PPP money was earmarked to help cash-strapped businesses keep their workers on staff; and if they could avoid layoffs, the loans would be forgiven.
During Abel's first year in the CEO job, G2 made two acquisitions followed by bumpy integrations. It also opened two international offices. It was all in line with the growth-first obsession that defined many startups at the time. But G2's big dream is to become a proper digital marketplace for business software, as Amazon did for books. To get there, the company invested heavily in hiring and marketing in 2018 and 2019 before hitting a financial squeeze. When G2 outgrew its long-time home at Chicago's Civic Opera House, it signed an 8-year lease on a 66,000 square-foot space down the street. Crain's Chicago described the move as a "drastic expansion" in response to a "hiring binge.
But, as is common when you switch domain names, the company's visitor numbers temporarily tanked when it launched the new url in April 2019. The company lost 35% of its traffic overnight, one former marketer said, although it eventually returned."It was a pretty critical investment for us to have a domain that's easy to search and to find, and having a 2-digit domain makes it easier to remember," she said, describing the cost of the G2 domain name as "below market price.
The company raised $55 million in a Series C led by IVP in October 2018, bringing its total funding to $100 million. That round valued G2 at nearly $500 million, according to TechCrunch. Despite its initial relief, G2 returned the loan in early June. The business performed better than it had expected, Decker said, and new government guidance led it to reconsider its eligibility for the funds.
G2 investors Jules Maltz from IVP, Arun Matthew from Accel, Tim Kopp from Hyde Park Venture Partners and Adam Koopersmith from Pritzker Group did not respond to requests for comment about G2's PPP loan filing or return.
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