jawfishgames111Jawfish Games appears to have taken its last breath. The Seattle online gaming startup, led by former professional poker player Phil Gordon, laid off its staff this week and is now in the process of “wrapping up operations,” according to a message posted to a Google Group Wednesday.

According to the message from Gordon, Jawfish was under contract to be acquired for $20 million by a “local” game company in November, a deal that later fell apart.

In the message to the Google Group, Gordon said that the acquiring company canceled the transaction “completely out of the blue” just a few days before it was to close.

“We’d spent all our remaining runway on legal to get to a definitive agreement. No further acquisitions were on the table, and no financing was available — the games space has gotten incredibly soft and difficult. Acquirer then knew we were broke and couldn’t afford to sue, so they refused to pay the break fee. Classy. Three days away from being the hero and turning a business plan on the back of a napkin into $20m in 20 months, now I’m the goat that ran an award-winning startup into the ground and lost everyone’s money. That’s the way the world works, I suppose.”

Phil Gordon
Phil Gordon

Jawfish raised $2.6 million in July 2012, including cash from The Founders Fund, the venture capital firm led by former PayPal CEO Peter Thiel. The cash was to be used to build out the Jawfish online gaming tournament platform, a service that was used by Seattle’s Big Fish for real-time tournament-style game called Match-Up!

A computer scientist and the first employee at Netsys Technologies, Gordon made a name for himself as an author and former commentator on Bravo’s popular ”Celebrity Poker Showdown” television show.

“We have some supremely talented, entrepreneurial minded folks here that I’d love to see well placed,” Gordon said in the message. He adds that the company plans to hold a “beauty pageant” on Friday at the Jawfish offices in order to place some of the company’s top engineers and developers, with a finder’s fee to be paid to the company to offset outstanding debt and legal bills from the “failed acquisition.”

We’ve reached out to Gordon for additional comment about the situation, and we will update when we hear back. (Update/Correction: When I wrote this earlier today, I didn’t realize that I had sent my email about the situation to the wrong email address for Phil Gordon. I apologize for the error. I have since spoken with Gordon, and he declined to comment).

Jawfish last year won top honors at Launch Festival, the big San Francisco entrepreneurial pitch fest hosted by Jason Calacanis. Judges were impressed with the company’s approach, with Google’s Don Dodge proclaiming in his remarks that Jawfish “is going to make a lot of money.”

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  • Phil Gordon

    If your company is interested in presenting to our incredibly talented 12 Seattle-based employees on Friday, please email me — there are two remaining open slots. We’ll give you 20-30 minutes to make your pitch, a few minutes for Q&A, and then a private conference room to meet with a few individuals. Mobile engineers, Artists, DevOps, Server Engineers, Metrics Analysts. phil@jawfishgames.com

  • Mark Dorsey

    Sorry to hear about that Phil (and team), it sounds like you were pretty close. The good news is that you still have a bunch of DVD’s to sell to tie you over until your next venture, which I am looking forward to seeing. Good luck to you and we hope to still see you at Startup Poker 2.0.

  • Bob Crimmins

    A disappointing result but a fight well fought. Best of luck to the entire Jawfish team.

    Since moving here, Phil has been a great contributor to the SEA startup ecosystem and I’m certain we haven’t seen the last of his efforts.

    Some things that watching Phil (at poker and business) has made me think more about: confidence without hubris, selective aggression, team counts most, go after big pots.

    • Al

      Jawfish certainly had plenty of hubris, not that it helped. At least this one ended better than Full Tilt Poker i.e. no federal indictments.

      How do you spend $2.6m in less than eighteen months?

  • Nick

    This article really could have used some quotes – either from Phil, or someone on his superbly talented team. Startups face long odds regardless, they got a ridiculously tough break, and Phil and team have executed well and as importantly conducted themselves with dignity and transparency throughout.

    Looking forward: I spoke with the folks at Jawfish today and they are just as talented as advertised. They have earned the respect of many in Seattle and I can’t wait to see what they do next.

  • Guest

    I wonder how the employees feel about Jawfish charging a 25% finders fee to prospective employers? Such a low class thing to do… the employees didn’t have a hand in the demise of the deal, yet the company is looking to make money to pay off debts on the backs of these employees? Wow.

    • Guest

      They could do what most Seattle based startups do when they flop… show you the door or hell, in the case of Contour they just lock you out from entering at all.

      I applaud Phil and team for at least advertising their employees talent to get them into new jobs.

      • Guest

        Yes, the right thing to do.. let people know you have great employees who need new jobs. But to charge a finder’s fee? Incredibly bad form and it’s not like employees are the property of the company. How about hold the beauty pageant for employees willing to participate without a fee? How about get their resumes out there to the companies you know the employees want to work at, etc. it’s the least you can do for your employees, after your startup fails.

        • Guest

          ” employees are the property of the company”
          depends on the agreements they signed

    • Bob Crimmins

      I actually found this to be a creative, responsible and scrappy move to do the right thing by both team and creditors. The only losers are the recruiters who would have been banging down the doors of this talented team so that they could pocket finders fees themselves.

      Is it such a stretch that employees of a startup would be loyal to the company they built together and to the founder that brought them together and who shared an opportunity to achieve something amazing? I would expect the fact that it didn’t work out against very long odds would have very little impact on the loyalty felt by a tight and functional team.

      Besides, in a small startup like Jawfish, the entire team “IS” the company. You sell this team short by assuming that they would not want to do what they could to support “their” company’s exit of the situation in as graceful a manner as possible.

      And in the mean time, I’d guess that this team is going to set a record for the least amount of time out of work after exiting a failed startup. Brilliant, actually.

      So bravo to Phil AND the entire Jawfish team for pulling one of the hat. Nice work guys.

    • Anders Taylor

      As an employee of Jawfish, I can tell you that Phil has been completely open and honest with the entire Jawfish team throughout the history of the company. I think this showing of Jawfish’s talented employees was a creative way to help out both the investors (to whom he has an obligation to maximize their return) and the employees (who were introduced to a lot of quickly growing startups in a short period of time). It might seem distasteful to an outside observer without the perspective of an insider, but you don’t know the history of what happened here and Phil’s integrity has only been solidified by how he has handled a very tough situation.

  • embee

    I have seen many social poker software companies, and have met many teams in the real money poker sector. This is the winning team. I do hope they stay together. I have never come across a team this experienced and talented in my 10 years in the online games/ gaming sector.

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