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Startup owner responds to BBB warning

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The owner of Daneventures LLC, dba Daneproof, said his company is on the brink of closure following a warning issued by the Better Business Bureau and debt that piled up in the startup’s first year.

The BBB on Jan. 3 cautioned potential customers of the Springfield-based seller of beds for Great Danes and other large dogs. According to the BBB, consumers filed 14 complaints since March against the company, claiming Daneproof did not deliver the beds ordered as long as six months earlier. The company has the lowest rating of F with the BBB, which states Daneventures is “not BBB accredited.” The BBB was unable to reach Daneproof owner Dan Smith via phone, email and postal mail, according to a news release.

Contacted by Springfield Business Journal Thursday afternoon, Smith said his year-old company operating at 2325 E. Bennett St. has since caught up on orders and he’s willing to work with the BBB to clear his company’s status with the organization.

“We’re not only caught up — I’ve got hundreds of beds’ worth of materials,” he said, noting 13 newer orders are in the works. “I’ve got to look at, do we get to finish making them and survive, or do I have to tell six people that they don’t have a job?”

Smith said he sat down with an attorney eight months ago to discuss filing for bankruptcy. When the lawyer told him his customers, employees and vendors would get nothing — because there were no assets to distribute — he decided against it.

“That weighed really heavily on my heart,” Smith said. “I had this fierce determination to pull it off and not quit.”

Smith said he later gave up his home and moved in with relatives to steer financing toward Daneproof.

The business owner cited early financial troubles due to a miscalculation of profits, as well as an accounting employee he claims siphoned funds from the company.

“We had zero cash, zero inventory and $80,000 in prepaid orders,” he said. “That happened real quick. We’ve clawed out of that.”

BBB St. Louis President and CEO Michelle Corey called the business out in its news release, saying, “When businesses take shortcuts around good business practices, they eventually suffer the consequences.”

Behind the scenes, Daneproof’s parent company switched to Daneventures from Red Tile Rehab LLC. Smith said customers who expressed interest in the company invested in the new LLC, while the debt remains behind the Red Tile Rehab business unit that’s no longer operational. If the company survives to reach profitability, he plans to use his income to pay off debts.

In the immediate future, Smith said without more sales, the company won’t survive another week.

“We’re cash strapped. Every penny we have is tied up in materials right now,” he said. “This could very quickly become a self-fulfilling prophecy, even though I have materials in the building.”

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