What Led to Kozmo's Final Delivery

So close but yet so far. When Kozmo registered for a $150 million initial public offering in March, 2000, spirits at the New York-based home-delivery service for snack food and videos were sky-high. Its investment bankers were top-tier, the team at Credit Suisse First Boston led by star banker Frank Quattrone. Its venture lineup had star power too, notably Amazon.com and Softbank Capital Partners. With the cash from its IPO, Kozmo planned to expand into 30 cities across the country. At a party on the penthouse floor of a Manhattan office building just after Kozmo filed for its offering, then-chief executive Joseph Park hopped up on a table and told his troops their future was limitless.

Alas, the saga of Kozmo had no happy ending. On Apr. 11 with its hopes of a stock offering a distant dream, Kozmo called it quits and laid off its 1,100 employees (see BW Online, 4/16/01, "Kozmo, We Hardly Knew Ye"). The company's path from stardom to the dot-com dustbin is symbolic of the end of the Internet boom. Fledgling companies that once could look forward to multibillion-dollar valuations in the stock market can no longer find investors willing to put up a dime for their stock. Twenty-something entrepreneurs who once headed the leading companies of the New Economy now find themselves headed for the unemployment lines.