By Gary Flood
Klaus Besier, the former head of SAP America, and subsequently chairman and chief executive officer of internet business software and services supplier OneWave Inc, has been forced out of the troubled company (CI No 3,155). The news came early last week when the financially battered outfit announced that New York-based Avix Ventures LP, the venture capital company that swooped in last month to grab what was left of once high-flying OneWave, had completed its acquisition of a majority (51.7%) share holding. Avix now owns 7.75 million common shares in its prize, a stake that cost around $8m. Immediately on securing ownership, Avix wasted no time setting OneWave’s house in order, firing 45 employees, taking total head count down to 70, a number well down from the over 150 it was employing at the end of 1996. Besier and chief financial officer Mark Gallagher have both been ousted. Avix’s principals Kevin Azzouz and Lennart Mengwall have stepped in to take over the day to day running of the company, as acting chief executive officer and chairman respectively. An ironic footnote to the whole sorry saga is that Besier has had to give 960,000 shares back to his former employer, in satisfaction of a $2.5m loan OneWave made to secure his services in the first place. Besier’s January 1996 move from SAP to the tiny Boston- based OneWave made headlines, partly because his resume suggested great things were to be expected from his new startup, and partly because his compensation package amounted to $7.5m, including those 960,000 shares. Compensation to CEO was a line item in the company’s finances for all of 1996. OneWave, a provider of web-enabled software for the development and deployment of mission-critical business applications across an organization’s information technology systems, and the extension of those applications to intranets and the internet did well out of its July IPO, receiving nearly $43.4m from the offering. But the company has been in disastrous straits since last October, its share price sliding from $21.50 to $1.50 in a remarkably short space of time (it is now $2.25). OneWave reported net losses of $12.3m on revenues of only $13.2m for its fiscal 1996 last December, and the trend was repeated in its first quarter figures in April, with revenue down from the same period in 1996 (from $2.38m to $1.51m) though with a cut in losses (from $8.5m to $2.4m). To further stem the flow of red ink, OneWave had been switching to emphasizing services and consulting rather than straight product, claiming the market was still too immature for selling shrink-wrap web extensions for existing business applications. Besier’s departure marks the end of a strange chapter for him personally and for OneWave, which is likely to pretty much slip back into obscurity. Perhaps there is some moral to be drawn here about misplaced faith in both internet startups and rock star business people?