Nine months ago, Milind Bharvirkar was ready to walk away from Priatek, the St. Petersburg advertising technology company he founded in 2010.
Now, he’s working to relaunch the company, which has been inactive for several months.
“We’re exploring. We’re going through a bunch of options and we’re engaging our investors and we’re trying to regain support to relaunch Priatek,” Bharvirkar told the St. Pete Catalyst.
Bharvirkar talked to the Catalyst on Aug. 30, one day after convening an investors’ meeting by telephone, and about three weeks after going to court to fight an arbitration demand by a Priatek investor, John Glasscock, who is seeking damages from Bharvirkar.
Bharvirkar “wasted Priatek’s assets,” according to the arbitration demand, while Bharvirkar told the Catalyst he worked to preserve the company’s assets.
Deal falls through
Priatek designed, manufactured and operated gaming kiosks that featured digital advertisements. It was a one-time bright light of the local technology community, with naming rights to 200 Central, the tallest building in St. Petersburg at that time, designation by TiE Tampa Bay as “Startup of the Year” in 2017, and recognition by Tech Tribune in 2018 as one of the five “Best Tech Startups in St. Petersburg.”
Much of what’s happened since then was detailed in the Aug. 8 court filing by Bharvirkar against Glasscock. The filing includes exhibits of correspondence between the two as well as an email Bharvirkar sent to investors.
Priatek was planning a major marketing push, installing kiosks into malls in the New York metropolitan area last fall, when Bharvirkar stepped away from the job of CEO and the day-to-day operations of the company. At that time, he told the Catalyst that he would remain chairman and focus on sales and business development.
On Dec. 13, 2018, an institutional investor offered to fund the company and buy out Bharvirkar’s equity position, he said. A written agreement was signed Dec. 21, and the transaction was scheduled to occur on Dec. 28. But the deal never happened.
“The institutional investor, I was told, dragged their feet for months and in March I was notified that the deal fell through,” he said.
When that happened, “everybody resigned and left the office,” he said.
Priatek, which was headquartered at 200 Central, has been gone from that location for several months, tenants told the Catalyst last week. The company’s website no longer exists, its listed phone number is not working, and it has not posted anything on social media since early January.
Through the Jones Law Group, Glascock sent an initial letter to Bharvirkar, as manager of Priatek, on May 21, 2019. That letter, filed as an exhibit to Bharvirkar’s court challenge, alleges 13 separate concerns, including improper and unauthorized use of funds.
Bharvirkar’s May 28 response said Priatek had hired an external investigator to look into earlier and similar allegations. The investigator found no evidence for the accusation, according to Bharvirkar’s letter.
“As you known, Priatek is in a precarious situation,” Bharvirkar wrote. “I don’t believe that a lawsuit with Priatek will be productive toward saving the company. Quite the opposite, it would negatively affect all investors.”
Another exhibit in Bharvirkar’s court filing was a May 23 email to about 80 people, including Glasscock, who are addressed as “investors.” In that email, Bharvirkar wrote that a special committee of investors had been helpful in recovering some assets and was working to put together a plan to relaunch the company.
On June 17, Glasscock, through his attorney, sent a formal verified demand for arbitration, reiterating and expanding on the allegations in the earlier letter and asking for $1 million in damages.
In his Aug. 8 court suit, Bharvirkar asked a Hillsborough County Circuit Court judge to halt further legal action or to strike the arbitration claim, saying he is not individually obligated to arbitrate.
A hearing date has not been set.
A request for additional comment from Glasscock through his attorney was pending return.
Bharvirkar said Glasscock served on the Priatek board of directors and participated in the oversight of the company.
“During that time he reviewed financials, operational plans, salaries, and he participated in the oversight of the company and I don’t ever remember him having massive objections over anything,” Bharvirkar said. “I believe that he’s upset at how events have unfolded, as am I. However I believe we’re getting our hands around this, and our plan and our hope is to relaunch Priatek.”
There was an investor meeting by phone on Aug. 29, Bharvirkar said.
“When you have as many investors as we do, you pretty much cover the whole scale, people that are supportive, people that are upset and everybody in the middle,” he said.
Investors are working to figure out a way to restart the now-inactive Priatek.
“If you ask me, would I rather start the company from its infancy or would I rather take over the company at the point that it is, I don’t think it’s very difficult. I think we built an amazing product. We built amazing technology,” Bharvirkar said. “When you build something very amazing like this, you have to have a go-to-market strategy and that go-to-market strategy needs capital, especially with hardware devices like kiosks. The next step is to go to our investors and try to raise the necessary capital to relaunch it.”
He said the amount of capital needed would depend on the strategy adopted.
Bharvirkar is a veteran entrepreneur who previously founded Global VR, a Silicon Valley gaming company and sold that company for seven figures. But a followup venture in Florida failed in part because of the recession.
“If you look at a lot of tech startups, I think there’s lots of stories of adversity along the path to eventual success. The companies that make it are the ones that can overcome the adversity,” Bharvirkar said. “Priatek as well as many other entrepreneurs and companies out there have seen dark days. But if you keep at it, and have resilience, you can overcome just about anything.”