Zirtual: Firm That Raised $5.5 Million In Funding Dumps Entire Staff, Customers

Early Monday morning, dedicated virtual assistant company Zirtual abruptly ceased operations. Business Insider reports that an e-mail went out from the company at 4:34 a.m. ET stating that Zirtual had “ceased operations, effective immediately. A second e-mail was sent to clients stating that the company was “‘pausing operations’ to reorganize its structure.”

Zirtual was co-founded in 2011 by Chief Executive Officer Mary Kate Donovan. Zirtual has raised $5.5 million in financing including $2 million in seed financing in January 2013 and over $3 million in debt: beginning in October 2014 and continuing up until the most recent $650,000-round completed on July 21.

Up until Sunday, Zirtual was still accepting subscriptions from new clients, reportedly charging as much as $1,000 per month. Zirtual user Aaron Weber tweeted:

Reports suggest that Zirtual had been hiring aggressively, expanding its headcount from 150 to 400 over the past 18 months. Employees were given no warning of any type of possible trouble with Zirtual from management. CEO Donavon was quoted less than a month ago in Fortune.

“Because what my employees don’t know could ultimately hurt the entire business. The sooner your team knows about upcoming shifts in the company — the better.

“Additionally, give your employees ample time to adjust, as change in a company can often lead to people feeling unstable in their positions. And be transparent.”

Former Zirtual employee Daniel Wells tweeted:

Reports suggest that Zirtual had experienced a slowdown over the summer months. Zirtual sales were not able to keep pace with the company’s hiring rate. As Ms. Wells noted, “Still paying FT hours to all w/out clients!”

Though the price of the virtual assistant services provided by Zirtual was as high as $1,000 per month, reports state that when the company was founded, unlimited services were offered for $99 per month. A decision was made to grandfather these clients and continue to honor their original contacts. Though the exact reasons for the hasty retreat of Zirtual remain unknown, speculation that the firm simply hired too many employees, too fast, appears to be the most likely reason.

The company had also been discussing raising the Zirtual minimum wage from $11 to $15, further confounding employees and customers as the the true nature of what has occurred.

Currently, there is no further communication from Zirtual CEO Donavon or other Zirtual management. The was no immediate reply to e-mails sent to the Zirtual address provided on the Zirtual.com website. Other members of the Zirtual management team included co-founders Erik Jensen and Collin Vine, Head of Marketing Grace Paglen and Head of Technology Joe Tyson.

[Screenshot of Zirtual.com]