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1Former Vector Launch CEO, board dispute reasons company filed for bankruptcy 
2By Hayley Ringle
3Reporter, Phoenix Business Journal
4Dec 20, 2019, 2:34pm MST
5Updated Dec 22, 2019, 12:30am MST
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7Update: This story was changed to include a comment from a Vector Launch board member.
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9Tucson-based Vector Launch Inc. and its plan to launch micro satellites into orbit faltered as a result of financing issues stemming from venture capital firms that opted out of investing more in the company.
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11What happened leading up to and after that is disputed by the company's former CEO, Jim Cantrell, and what remains of the company and its board.
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13What is undisputed is the decision by Sequoia Capital to not to invest more money in Vector Launch ultimately led to other investors bailing on the company. Sequoia Capital also had its partner Bill Coughran resign from Vector’s board, according to people familiar with the company's challenges.
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15While Coughran was not available for comment, Sequoia Capital provided a statement to the Business Journal on its decision.
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17“The company failed to meet strategic objectives and financial projections it outlined to the board,” a Sequoia spokesperson said in an emailed statement. “We ultimately made the decision to part ways with the company based on its inability to achieve its proposed plans.”
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19Sequoia Capital didn’t pull any of its investment, it just didn’t want to give any more money, a spokeswoman confirmed.
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21Vector Launch filed for Chapter 11 bankruptcy protection on Dec. 13.
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23The fast-growing startup had raised at least $91 million in capital from a number of investors, was on an IPO trajectory and was being lauded by state leaders as a promising Arizona company that could garner big funding rounds.
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25After raising Series A and B rounds, Vector was in the process of raising a $10 million to $15 million bridge round of debt and equity, which is common between rounds, said Jim Cantrell, Vector co-founder and former CEO. That’s when Sequoia Capital was asked if they wanted to participate, and they declined.
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27“It was an unusually aggressive no,” said Cantrell, a founding member of Elon Musk’s SpaceX company.
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29Because of that, other venture capital firms decided not to participate, he said.
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31The ripple effect led the company to explore hiring new leadership. The company was hiring a new president because John Garvey, Vector’s co-founder, had been demoted from president of launch services to chief product officer earlier this year, Cantrell said, adding he believed he was being pushed out as well.
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33Garvey’s company, Garvey Spacecraft Corp., was acquired to start Vector in March 2016. Garvey started as Vector’s chief technology officer in 2016 and became president in February 2018. Garvey could not be reached for comment.
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35The company and its board, however, contend Cantrell's view of what happened is not accurate, but they are reticent to comment on the record because of the continuing bankruptcy proceedings.
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37“Vector Launch Inc. strongly disputes the statements and mischaracterizations made by our former CEO Jim Cantrell referenced in your Dec. 20 article titled ‘Former Vector Launch CEO talks about reasons company filed for bankruptcy," said Vector Launch board member Shaun Coleman in an emailed statement. "However, due to Vector's current and ongoing restructuring we are unable to comment directly on the claims, but will in due course.”
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39Money issues led the company to lay off its 180 employees in early August, including Cantrell, who remained a board member.
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41However, Cantrell said he resigned from the board a few days later in August because the board wouldn’t consider his alternate financing loan from an existing investor. He claimed the deal would have saved the company.
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43“We could have restructured the company and raised more money,” Cantrell said. “I thought I had pulled a rabbit out of the hat, but they wouldn’t even consider it. I said to myself this is a train wreck and I didn’t want to be on the train.”
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45Cantrell is now in Michigan helping some colleagues with the R2 Space startup.
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47Vector disclosed in filings it planned to sell some satellite technology assets to Lockheed Martin Corp. (NYSE: LMT).
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49Vector still owes several employees severance, Cantrell said. Cantrell is suing the company in Pima County Superior Court because he said he is still owed $500,000.
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51Rincon Investments Inc. also is suing Vector in the same court claiming securities fraud, according to a court filing.
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53Vector has a lease for 15 acres at Pima County Aerospace, Defense & Technology Research and Business Park in Tucson, south of Raytheon Co.’s campus (NYSE: RTN). Vector also had a test facility at Pinal Airpark they stopped using in August, said John Moffatt, Pima County’s economic development director.
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55However, Vector does not have any presence in Tucson since it moved operations to Huntington Beach in August where Garvey lives, Moffatt added.
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57Vector also never broke ground on its planned 110,000-square-foot rocket manufacturing factory in the Pima County Business Park because of financing issues, Moffat said.
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59The factory would have allowed Vector to build up to 100 rocket launchers a year, with the capacity to double in size when more space was needed.
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61“Vector had just received an Air Force contract and was right on the cusp, so it’s really unfortunate,” Moffatt said. “It was great technology. There was all kinds of interest worldwide. We felt they were definitely a positive growth company. I think it was pretty ugly at the end. It was unfortunate because they had great momentum.”