Stellenbosch-based startup Custostech says it has been forced to lay off most its staff after SA venture capital (VC) company HAVAÍC sued the startup for $4.45-million, alleging its founders reneged on an investment agreement.
In legal papers, Custostech, which uses an innovative blockchain solution to protect media such as films from piracy and has helped successfully protect about 600 film titles, disputes having reneged on the agreement.
The startup’s founders Gert-Jan van Rooyen and Fred Lutz argue that they never signed the final agreement to accept the VC’s investment.
Van Rooyen, who is the startup’s CEO, told Ventureburn, last week that the startup had laid off eight of its 10 employees and that effective from 31 March would be operating on a skeleton staff of two part-timers to ensure that the company could continue to manage contracts with its current clients.
He and Lutz have also had to resign in order to cut costs and are working part-time on the startup, with the hope of starting things up again once the matter is resolved.
Custostech says it has been forced to lay off most its staff after SA VC HAVAÍC sued the startup for $4.45m, alleging its founders reneged on Click here to read entire article
Source:: Venture Burn