This morning people awoke to an email from a well known Toronto based startup, Sprouter. The content of the email direct “Sprouter Shutting Down August 2nd” and it’s content was heartfelt and seemingly honest;

The email attempts to offer a reasonable explanation for the shut down under the broad term “capital constraints” and that they’ve “simply run out of options”. However, while in theory this is a plausible reason, to me it sounds like there may be other factors at play. I may be totally wrong, so let’s first point out these are my own personal theories so I welcome you to disagree or provide your own theories!

First, Sprouter didn’t have any apparent revenue model. Their pivot from Entrepreneur Social Network to Q&A for Entrepreneurs didn’t solve this either. There weren’t even ads on the site. Here was this wonderful niche site with a targeted community of entrepreneurs. The opportunity was fantastic to charge for ads.

What about partnering with entrepreneur assisting companies? For example, “Sprouter Financing” where a bank like CIBC or TD could have had a page dedicated towards funding options for startups (which Sprouter could have used themselves). Or another option to develop “Seedling Centers” where businesses with open space (such as less busy restaurants) could offer their space for rent at a low rate, kind of an adhoc communal workspace or a more accepted ‘coffice’.

Or, what about incorporating paid features. For example, Q&A from experts, allowing people to ask one question free per month after which it’s a fee… or perhaps to get your question answered immediately, a “Fast Pass” if you will. How about premium content for a subscription fee? There just seems to be something missing in the “capital constraints” and “run out of options” reason.

Hell, why not even use your own service and ask your experts what they would do to monetize?!

Which is why I suspect there being more to this story…

Maybe it could be buyout that couldn’t be refused (interestingly, and maybe it’s a glitch but if you look up Sprouter on Alexa, it rerouts to qasc.com).

Maybe declining traffic over the last year according to Compete was the reason. The pivot from Social Network to Q&A happened around February, shortly after traffic clearly was at it’s lowest and the change didn’t set the world on fire. In reality and I said this before, trying to compete with other Q&A’s such as Quora would be impossible. Maybe it’s a situation of just a lack of desire/passion to keep it going?

Or maybe investors (I’m not sure how Sprouter is financed) just had enough with it and didn’t want to even look at monetizing. They instead would choose to cut their losses and run with hopes of turning the property over to someone else.

Now, regardless of what the reason may be… the reality is Sprouter was part of the Toronto startup scene and its loss is definitely no small thing. Sarah and Erin have become well known as a result of the website and their very successful SproutUps (were they making money from those? If not… why? You drove huge business to restaurants for food and drinks, if you didn’t negotiate a cut that’s not good). The impact they had can clearly be seen just by the outpouring of support from everyone on Twitter being saddened by the loss (though, I wonder how many of those people regularly visited the site. I bet it’s not many, I was only a casual user, maybe once every couple months).

The Twitter community seems to be both sad but also conflicted and wondering just why they never even attempted to monetize. There IS more to this story… we’re just not getting it right now. I imagine over time the real reasons will come out and it will all make more sense… for now though, we’re going to just have to theorize what the real answer could be.