Greg Selkoe Tells Story Behind Bankruptcy of Karmaloop
Although Karmaloop is still in business, the streetwear retailer hit a rough patch in recent years -- filing bankruptcy in 2015 and ousting founder Greg Selkoe in the process.
Selkoe opened up about the entire experience of losing control of Karmaloop and its failure in an op-ed piece, published by the Huffington Post.
In the piece, he claims that he took a loan out from venture lenders Comvest Partners to expand, and instead, was pushed into bankruptcy. He goes on to delve into his side of the story of what happened behind the scenes, and claims Comvest essentially tried to ruin his life.
Below is an excerpt. You can read the full piece at the Huffington Post.
The end? Nope … Comvest came after me personally for $5+ million. Comvest knew I didn’t have any money – I had literally liquidated everything (down to my wife’s engagement ring and all my savings, 401k, etc.) and (foolishly) put every penny I could find back into Karmaloop to try to save it – yet they came after me anyway. Why? To try to push me into personal bankruptcy and tie me up. Why again? Because I believe and have been told they want the entrepreneur/owner cowed. Banks like Comvest subscribe to the philosophy of always attack; never defend. A strong offense is a strong defense. And even if they can get one penny, they wouldn’t think twice about ruining someone’s life.
These venture lending/private equity hybrid institutions can destabilize, take, own and operate or sell your company, make a profit and still come after you, the entrepreneur or owner, for additional money because of guaranty language in a bank note.