Entellium
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Entellium was a U.S. software company developing on-demand CRM software for small and midsize businesses. Founded in Kuala Lumpur, Malaysia in May 2000 by Paul Johnston, a former Apple sales executive, it moved its headquarters to Seattle in 2003 while keeping R&D in Kuala Lumpur. Its products included Rave (a smart-client CRM), eSalesForce (a web-based CRM), and eCustomerCenter (an issue-tracking system).
02 / Entellium FAILURE REASONS
Failure reasons
Entellium collapsed in a wire fraud scandal. On October 7, 2008, CEO Paul Johnston and CFO Parrish Jones were arrested and charged with wire fraud for systematically inflating revenues to attract investment — actual 2006 revenue was $582,789 but was reported as nearly $4 million; 2007's $1.4 million was reported as $6.2 million; 2008's $1.7 million as $5.2 million — helping draw more than $50 million in investment, including $19 million from Ignition Partners. Johnston later pleaded guilty (2009) and was sentenced to three years in federal prison.
03 / EVENT HISTORY
Events in the structured record
- Founded
Paul Johnston founded Entellium in Kuala Lumpur, Malaysia in May 2000; headquarters moved to Seattle in 2003.
- Fraud arrests and bankruptcy
On October 3, 2008, Entellium laid off all but a handful of employees, having run out of money; on October 7, CEO Paul Johnston and CFO Parrish Jones were arrested for wire fraud; on December 2, 2008, Entellium filed for Chapter 11 bankruptcy protection.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
On December 2, 2008, Entellium filed for Chapter 11 bankruptcy protection.
- 02
Its assets were sold to Intuit in bankruptcy court; as of October 2009 Intuit was reportedly not using the software.
- 03
In 2009, CEO Paul Johnston pleaded guilty to falsifying revenue figures and was sentenced to three years in federal prison.