Last spring, internet success Mike Rhodes turned his grandiose idea for a tech incubator into reality, when he founded the Syncubator, in a full floor 18,000-sq. ft. West Loop loft.
His vision was to create a collective, a congenial place where budding tech entrepreneurs could develop their million dollar ideas and avail themselves of low-cost support services from more than a dozen “partner” specialists.
Best of all, when it came time to take their idea to market, they would receive financing from Rhodes’ $3 million investment fund.
The problem was – in the end there was no fund.
Investors that Rhodes had claimed bought $250,000 units in the fund to underwrite the next Facebook never materialized.
One company that had been assured by Rhodes that funds for their project were en route racked up thousands of dollars in legal bills preparing the necessary investment documents. The company knew something was seriously wrong when Rhodes did not return Emails or phone calls.
On March 1 the Syncubator officially closed.
Rhodes left the premises seemingly untouched by the meltdown. Not so detached were the remaining four partners, out of the original 13, who felt they had been duped by Rhodes’ vision of a new generation of techpreneurs. “They will show strength with offerings people can’t envision right now,” Rhodes told the Reel in October.
One of those partners was director/cameraman Andy Ryan, whose Moto Media production company was one of the first services to be invited to join the Syncubator.
“Interlinking startups with vendors was a good concept and the space was very cool,” Ryan said. “It also gave us exposure to five or six solid new clients. I thought the funding was a done deal and hoped they’d pull it off. I’m sorry it ended.”
Syncubator rent went unpaid for many months
Money that allegedly did accrue to Rhodes were rents paid to his Syncubator Management Services, which operated the space. Partners paid thousands of dollars a month for their perimeter offices and the startups paid hundreds of dollars for their shared table space.
Many months of unpaid Syncubator rent brought the deteriorating situation to a head. The landlord agreed to interested parties taking over the lease and working out a payment plan – but only if Rhodes were removed from the lease. He refused.
No one is talking about how and why Rhodes relented, thus allowed the landlord to begin the space vacating process, but one can guess.
Days before the Syncubator ended, Rhodes sent out an Email accepting responsibility for the “current situation.”
“Suffice to say there were many reasons this particular space didn’t work as planned…” he wrote. “I take the lion’s share of the reasons that brought about the current situation. Some bad decisions were made that caused us not to launch the fund in a timely manner. That affected our ability to make the model work.”
Rhodes said that while some of the “office tenants” — the Sync partners — may remain in the space, “Others may move with us to a new space that will be the new Sync. The technology and innovation community here in the Midwest is growing. The Sync will continue to foster this growth.”
The four remaining partners who had hoped they might be able to remain in the Sync space were told by the landlord on Friday they had to vacate the premises by March 30. It is doubtful they will move with Rhodes to new space for the next Syncubator.