Oregon Public Broadcasting

OPB’s occasional series, Hard Times , has been looking at the lives of people affected by the recession.

Chris Baker is a Portland entrepreneur, who’s been trying to keep his software company afloat during this recession. Last time we talked, he’d laid-off 80 percent of his staff.

Chris Baker: “On Friday we told everyone, no one’s coming into work on Monday and nobody’s going to get a pay check. I mean we don’t people to work and not get paid.”

Now, as Kristian Foden-Vencil reports, he’s had to take aim at the higher echelons of the company -- laying-off the CEO.

Baker’s company, CrossCurrent, sells software that helps doctors bill health insurance companies.

By schmoozing with wealthy individuals, he and his partner have raised $4 million over the last five years -- money they used to hire staff to write computer code.

But, says Baker, as they were putting the final touches on their product last year, they decided they needed help.

Chris Baker: “We’d come to the point where we’d really exhausted our ability to raise any significant money and felt like it was time, with a full product built, to go for a bigger chunk of change and go for growth.”

So they went out and  searched for a new CEO. They wanted someone who could raise large sums of money and use it to sell their product nationwide.

One of ‘CrossCurrent’s’ investors suggested a man named John Valavanis from Chicago.  Baker says they didn’t have a lot of time to conduct interviews and Valavanis had a decent resume, so they hired him.

Nine months later, says Baker, Valavanis wasn’t working out.

Chris Baker: “He was here to raise the money and he didn’t raise the money. And so we determined that we would be better off spending that money elsewhere.”

Valavanis says the timing was terrible -- between the recession and the credit crisis, it was all but impossible to raise capital.

But CrossCurrent’s board fired him anyway, and they’re now working out the details of his severance package.

Valavanis is back in Chicago. He says he did find a venture capital investor willing to lend CrossCurrent some money, but the terms of the deal placed the value of shares held by the company’s board of directors very low.

John Valavanis: “The board decided that rather than go off and be crammed down on stock. They thought that they would try and grow the company organically. So as a result use the funds of my salary to hire some other key essential personnel.”

He says he put his heart and soul into the company. And just like anyone else who’s laid-off, he’s going through the classic symptoms of loss. And finding another CEO position is extremely difficult.

John Valavanis: “You know, there’s not a line of CEO positions opened up -- you go on a website to find the next CEO job. It requires an awful lot of networking as well as making sure that you’re the right fit for the job that might be coming available. So you typically will be working those positions well in advance. On the other hand. I have a certain levels of transferable skills that should help me move on in my career and apply those in my next venture.”

Back in Portland at CrossCurrent, they are making sales, but there isn’t the booming growth they were hoping for -- not yet, at least.

Baker says he learned a valuable lesson.

Chris Baker: “As an Oregonian, we sit in a small city and think, gosh there are people out there that certainly must know better than us sitting here, about how to raise money and how to run things. And I would say one of the lessons I’ve learned is that that’s not necessarily true, that Portlanders and Oregonians shouldn’t undervalue their expertise and think that someone else can be your savior.”

There have been some other personnel changes at the company as well. Chris Baker’s 69-year-old mother Sandy, who was working for shares in CrossCurrent has decided to go back to retirement.

Instead, Baker’s sister, Heather, is stepping in to help manage the office.

Heather Baker: “He and I have never actually worked together before.  He definitely has a different set of skills than I do. I think it’ll be an interesting experience in terms of getting to know each other on a different level.”

Meanwhile Chris Baker’s short-term aim is to make sure CrossCurrent can pay its bills.

As long as they can do that, he says, no venture capitalist will be able to swoop-in, buy them for a song, then sell them for a fortune once the economy turns around.

5/20/2009 - Layoffs Are Hard On The Bosses Too