TechShop closure leaves entrepreneurs out in the cold

SAN FRANCISCO (KGO) -- From products you've seen on Shark Tank to those little Square credit card readers, countless inventions have been born at the playground of tools and training for makers called TechShop.

But on November 15, TechShop shut down -- taking members and even employees by surprise, and leaving questions still swirling more than two weeks later.

"TechShop gave access to all sorts of machinery that I actually used to build my first prototype," said Logan Riley, who appeared on Shark Tank shortly after the closure to make a deal for his portable record player called RokBlok.

Riley said he learned of the closure while he was in China, working with partners who will manufacture his device for consumers.

"It was so abrupt. It wasn't, 'We're closing next week, we're closing today,' it's, 'We've closed,'" he said.

Equally surprised was Marc Roth, the entrepreneur who joined TechShop six years ago while he was homeless, and learned how to use a laser cutter. He's since started three businesses and helped others who are down on their luck, which earned him a trip to the White House under President Obama.

"I didn't know that they were really going to close the doors," Roth said, adding that he knew TechShop was having money problems and had even offered to help the company find new sources of revenue.

For the entrepreneurs and craftspeople who showed up to find TechShop's flagship San Francisco location padlocked, surprise quickly turned to panic.

"You have people whose primary source of income derived from tools they could use here," said Rick Zuzow, whose biotech startup relied on TechShop to make and fix lab equipment.

For those who make crafts that are given as gifts, the impact is magnified by terrible timing.

"With the Christmas rush, we've got 100 small businesses in here," Roth said, gesturing to the padlocked front door on Howard Street. "They've already done sales, they've already taken money, they've already bought raw materials and had them shipped here -- and the materials are sitting inside that building, locked up."

In the days since the closure, things have gotten more confusing. Though members were initially informed that TechShop planned to file for Chapter 7 bankruptcy, a more recent email talked of reopening the facilities under new ownership. All the while, the doors have stayed closed -- and the City of San Francisco has gotten involved.

"Our number one priority has been helping these businesses find ways to get inside," said Laurel Arvanitidis of the city's Economic and Workforce Development office.

Arvanitidis said the city believes TechShop's closure leaves a serious hole in the economy of a city where space is at a premium and rent is high.

"Think about Steve Jobs making his first computer in his parents' garage. We don't have garages. This -- a maker space -- is the garage for a San Franciscan," she said.

Though Arvanitidis said some members have been able to retrieve their belongings from inside the building, others like Curtis Culp have not.

"I was working on 3D printing -- doing prosthetic fingers," Kulp said.

He lost most of his own fingers in a battle with toxic shock syndrome more than a decade ago and was hoping to be the first user of his new product. His prototypes and his 3D printer are locked inside the TechShop building.

"There's no way to get ahold of anybody," Kulp said.

ABC7 News did get ahold of a member of TechShop's board of directors, who said the company is declining interviews at the request of its lawyers but did write an open letter to members. The letter summarizes years of money problems at the company and details efforts to transfer its assets to new owners, who could reopen the San Francisco location by the end of the year.

"At this point, we've missed the window of saving Christmas," Roth said, noting that Black Friday and Cyber Monday have both come and gone.

Arvanitidis says the city is continuing to help makers find other businesses whose shop space and machinery they can use to produce their products, as negotiations at TechShop continue behind the scenes.

Roth said he hopes that like Riley -- who sold the rights to produce RokBlok for $500,000 during his appearance on Shark Tank -- the board of TechShop can also reach a deal.
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