“It’s been downhill since November 2021.” This is the insider of Sideways, a startup founded by 22-year-old businessman Marco Palacios, who was recently awarded Young Entrepreneur of the Year in the category “Innovation” by the Society. from Madrid and who, as reported by elDiario.es, intends to liquidate his company in a few days.
After capturing hundreds of thousands of euros from dozens of investors, Palacios intends to end the existence of this firm located in Tres Cantos (Madrid). He intends to do this after negotiating until recently, when he was already discussing the lowering of the blind, the granting of a state credit of 274,000 euros on very favorable terms by the state ENISA. Isabel Díaz Ayuso’s government award, which was awarded 8,000 euros in cash, was presented to her a few days ago, but it was handed out in July, just after the businessman fired his underlings.
This Thursday, Palacios refused to attend elDiario.es and published a post on LinkedIn explaining that “Sideways has gone through many problems, with partners, workers, lack of funding and other tensions. For this reason, I have made a decision. This It was a very good project in which I learned a lot, but in life you have to know how to finish it, and in my case, that moment was now.”
“Was I wrong? Yes. Could I have done something better? Absolutely. I feel bad that I had to close and a lot of people, including a lot of family and friends, are losing money? Yes. I admit my mistake, I’m human. I’m sorry,” the businessman added. on the news” before the attack.
A few months ago, the prospects for Sideways, which was dedicated to designing autonomous wheelchairs, looked very promising. In January, the Spanish edition of the prestigious Forbes magazine included Palacio in the “22 Protagonists of Change”: people “examples of good practice” for their “productivity and commitment when it comes to the continuation or development of their ideas” and working at the forefront of leading companies and projects that change reality and put In the elite of their violation.”
In this list, the young man from Madrid appeared together with other figures of the Spanish entrepreneurial ecosystem or the famous “strimmer” Ibay Llano. But it all fell apart within months for Sideways, which hasn’t signed a single euro since its inception in 2020, according to the goods register.
A source with direct knowledge of the process explains that the negotiations started shortly before receiving this preferential loan from ENISA, at the end of 2021, the young businessman published another post on LinkedIn blaming the lack of ambition of the big funds. Spanish people.
The venture capital industry, he said, “is thriving.” Its managers “have never founded their own startup and therefore have no idea how to run it”; “They like to say they want to innovate, they want to boost the economy, but when it comes to radically different investments like Sideways, they’re afraid,” he laments. The comment earned him rebuke from high-profile investors such as Inaki Arola of K-Fund: “21 years, one year and four years as a founder and already with a lot of experience,” the car founder. .com ironically sold to Santander in 2021.
In August, Palacios informed Sideways investors that the state-owned company had already “pre-approved” this loan from ENISA, amounting to €274,000. The credit will have very favorable terms. It did not include providing guarantees to the borrower: all risks were assumed by the state. But the situation of the company was already very difficult. By then, Palacios seemed determined to call it quits. At this time, Sideways had just held a shareholder meeting where virtually no agenda items were approved.
At the meeting of partners, only the annual reports for 2021 appeared, the situation deteriorated very quickly. A few weeks earlier, on June 27, Palacios fired “without prior notice” the four engineers previously hired to carry out the project. These workers put in “10-12 hour days,” says a source with direct knowledge of the matter.
Things started getting ugly months ago. In December 2021, the young entrepreneur requested new funds from investors who had already invested money in the company through a capital increase. “He took €80,000 and promised everything was going very well,” says the source. The turning point came after this expansion (earlier this year). Palacios wanted to raise wages to 90,000 euros and keep workers at 30,000 euros. The proposal fell like a bomb on the company, which until recently had been run as a “family” and was a “money-losing machine”.
The young entrepreneur wanted this fee charged to him after he completed a funding round that he was aiming to raise 2 million euros. In principle, this funding should have started in January. Then it was postponed. “When he was supposed to make that round, he went to the United States,” this source says. And in the end, the operation was not performed.
Sidewaysproject said on its website (it’s no longer available) until this week that since its inception in 2020, it had raised half a million dollars in capital from more than 25 investors, who, according to industry sources, owned about 16% of the equity. The company: more than half a million euros, at the current exchange rate. In February 2020, he raised around 80,000 euros in the first round. And at the end of the same year, he managed to get another 275,000 euros, which allowed him to hire staff and move to new offices. Thus, until the capital increase in December 2021 and the planned large round this year.
A few days before calling a meeting in which the dissolution of the company will be approved in a few days, Palacios offered to first step down from his position as the sole administrator and, later, to retain his acting participation. A company he christened years ago as the “Tesla of wheelchairs.” He had been showing little interest in the company for months, the source said: “He stopped coming to the office for work and practically stopped showing up in mid-February.” “I didn’t want to continue the project, I wanted to create other companies,” he adds.
A version that contradicts what Palacios said this week in a video published by the Community of Madrid after giving the award: “My prospects with Sideways is that it will continue to grow, as it has been for the last three years, and slowly we will. I want to get closer to hospitals so we can do real tests with patients,” says the award-winning businessman in this video, who said he wants to use the €8,000 award to electrify an off-road motorcycle.
A few weeks after their trip to the United States, the four engineers were released. The cut came the day before July 8, when Madrid’s Ministry of Family, Youth and Social Policy approved the award to Palacios. Nominations opened on April 5. “What surprises me is that he asked for this award,” said a person who has worked with him in recent years, without explaining why he received the award after the company ended.
The rules of the contest included the possibility of opting out after the award of the prize. They requested a report that described, among other things, the “technical and economic feasibility of the project”, a market analysis or a detailed budget with the results of previous years and three years of revenue, expenditure and treasury projections.
The award jury consisted of Fermin Albadalejo, President of the Spanish Confederation of Young Entrepreneurs’ Associations (CEAJE); Lorenzo Amor, president of the National Federation of Autonomous Workers’ Associations (ATA); The co-founder of the chain of fashion clothing stores El Ganso, Clemente Chebrian, and the director general of the Madrid Executive Youth, Nikolai Jordanov, with a voice, but without a voice.
Source: El Diario