Neighborly, a San Francisco-based finance startup backed by actor and entrepreneur Ashton Kutcher -- has just told its employees it can’t pay them, according to Bloomberg.
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The payroll stop was “needed” while the company continues a shift from from its original focus on municipal bond deals to financing broadband internet service, which the company sees as “critical for the economic and innovation output of the nation, and the essential foundation for every future-ready community.”
On Sunday, CEO Jase Wilson told employees that a funding deal for the firm wasn't completed last week and asked employees to stop working, according to Bloomberg, which obtained a copy of the memo.
“As of tonight, we are not in a position to compensate you,” Wilson wrote, adding that employees would be paid for work performed last week, according to Bloomberg.
How long the company wouldn't be able to pay workers wasn't immediately clear, but Wilson said he doesn’t think Neighborly will have to shut down, according to the report. Its investors "are all aligned on what we need to do, but this still comes with another difficult period of reorganization," Wilson wrote.
The company is backed by investors such as Emerson Collective, 8VC, Maven Ventures, Stanford University and Ashton Kutcher’s Sound Ventures.
Neighborly's original focus was selling municipal bonds in smaller increments than the typical $5,000 lots, which would make it easier for residents to invest in their own communities.
Its impact on the state and local debt markets, however, was limited, according to Bloomberg.
Neighborly didn't immediately responded to FOX Business' request for comment.
Neighborly said in July it would move away from that business and cut 25 percent of its workforce. It focuses now on financing and deploying fiber-optic broadband infrastructure in communities around the U.S., which it says will reduce the burden on local governments and pave the way for broadband services to enter new markets.