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Originally published Saturday, October 4, 2008 at 12:00 AM

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Workers get ax at software maker Entellium, told money ran out

Seattle software company Entellium shuts down.

Seattle Times business reporter

On Tuesday, Entellium was inviting people to visit its booth and presentation on managing customers at a conference this weekend. By Friday, the Seattle company was struggling to stay in business.

Entellium, the 8-year-old private company that won awards for its software and snagged more than $30 million in venture-capital backing, apparently ran out of money.

It makes customer-relationship-management software for small businesses.

On Friday morning, all but a handful of the 100 employees in Seattle were dismissed.

"They said there is no money. We're being liquidated," said Pat, an employee who wanted only his first name used.

Friday's move came after the abrupt resignations Tuesday of Chief Executive Paul "P.J." Johnston and Senior Vice President Parrish L. Jones, who was in charge of finance.

Johnston and Jones "have resigned from the company, effective immediately," the company said in a statement late Wednesday.

Entellium did not disclose details of the departures, saying only that board members were convening with senior executives to determine the company's course of action.

After the resignations, Entellium removed any reference to the two executives on its Web site, including a blog written by Johnston and a description of them among the management team.

Entellium's backers included Bellevue-based Ignition Partners and Sigma Partners.

Ignition's Michelle Goldberg and Jonathan Roberts served on Entellium's board. They could not be reached for comment this week.

Calls to Entellium went unanswered Friday.

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Employees said they were told the company had paid up employee COBRA health-insurance plans through the end of the year and would issue final paychecks Monday.

Laid-off employees gathered at a Mexican restaurant across from the office Friday. They were given no explanation for the company's sudden collapse.

"People are feeling dismay, disenchantment, anger," said the employee named Pat.

Johnston, who founded Entellium in Malaysia in 2000, moved the headquarters to Seattle in 2003. Entellium maintained a research and development office in Kuala Lumpur.

With almost 200 employees worldwide last year, the company was growing rapidly and attempting to take on competitors such as Salesforce.com.

It had two rounds of layoffs earlier this year but said in June it had 10 straight quarters of growth and was doubling its customer base every year for three years.

A Wikipedia entry on Johnston was updated by Thursday to say he quit his position at Entellium.

Kristi Heim: 206-464-2718 or kheim@seattletimes.com

Copyright © 2008 The Seattle Times Company

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