There are some untrue things posted on here about Search Party. Firstly, the idea that it is burning $10 million cash per year is plain false. The accounts in the prospectus show a $6 million loss and with revenue growing exponentially current cash burn could be less still. Also, they are expecting a significant R&D rebate shortly.
In my opinion Search Party has easily the best business model of 1PG, RFN, LVH etc for the simple reason that it embraces recruiters whereas the others try to cut them out. Recruiters add lots of value to the recruitment process in terms of vetting candidates, alerting them to job opportunities and ensuring CVs are kept up to date and are reliable. This is a simple idea but it holds the secret as to why SP1 is able to solve the efficiency problem in the recruitment industry in a way that all the other tech companies can't including LinkedIn and the job boards.
They might only be making $30k of net revenue a month but this is the very beginning (all companies start somewhere) and placements are growing at 50% per quarter (SP1 receive $1,200 per placement on average). The platform is in place, recruiters and employers are signed up and engaged and every passing month shows exponential revenue growth.
The reason that the RTO flopped is not likely to be because founding investors are exiting. Most of these shares are escrowed and we've seen two of the largest holders, the CEO and the chairman buy more shares on market. The largest shareholder is Josh Rogers, a founding investor in Freelancer and an expert in online marketplaces.
The real reason is probably stale Applabs holders exiting (Applabs shareholders from before the RTO make up 50 million shares) combined with weak market sentiment due to pump and dumps in RFN and 1PG. The latter reason is very unfortunate for SP1 because the business has real substance but now investors are untrusting of recruitment tech startups in general.
