LC Drives: success story or cautionary tale?
POTSDAM, New York (WWNY) - A Potsdam success story has suddenly short-circuited after a business told all of its employees they’re temporarily laid off.
LC Drives was a shining example. In no time, the Potsdam startup went from employing just a handful to 125. Then Monday, everyone was sent home.
“The initial concern is an economic concern for the village based on business and that is mirrored closely by our concern for all those people who lost their jobs...Our heart goes out to those folks,” said Greg Thompson, Potsdam village administrator.
Employees received a message Tuesday saying that a “financial situation has impacted our business significantly.” And it offered this: “Please accept our appreciation for all your hard work with LC Drives as we try to navigate our business through a difficult time.”
The company makes electric motors. It claims the shutdown is temporary. Separately, the company has said it’s seeking “Series B” funding. It previously received a $15 million “Series A” cash infusion from Koch Industries.
“Shutting your operations down says you’re really short on cash. That’s not going to help their ability to raise round B funding,” said Gregory Gardner, SUNY Potsdam professor of business.
Clarkson University’s entrepreneurship center helped LC Drives get off the ground at the college’s Damon Hall. The business also received $700,000 in state grants. It’s nearly finished paying off $500,000 in loans from the St. Lawrence County Industrial Development Agency.
Clarkson emailed a statement to 7 News saying it will continue to foster startups.
“We respect LC Drives’ right to manage their firm and make the decisions they feel are best for the long-run right now based on their own independent assessments.”
It’s still possible the success story could continue at LC Drives. Or, it could become just another cautionary tale.
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