How shutdown Bay Area tech companies ditch their fancy gear fast

The Bay Area’s tech industry is known for its cycles of boom and bust. Startups burn through cash as they skyrocket in size and ambition, accumulating outrageous perks and office equipment along the way. Then they crash to Earth, with nothing but their private planes or massive 3D printers to pad the impact.

Enter John Carroll. 

Carroll is one of the under-the-radar salespeople of the tech world, an auctioneer who swoops in to peddle companies’ high-tech detritus. In 2010, he founded the auction company Silicon Valley Disposition, which specializes in hawking the remains and excess of tech companies. The past few years have seen a “barrage” of items as companies continued to shutter, Carroll told SFGATE. He’s sold a balloon launch station from the defunct Google project Loon, run an auction for 20,000 e-scooters and even helped one startup ditch a couple of planes.

SVD is like a version of eBay, if eBay specialized in bioreactors, sold $956,000 welding robots and offered laptops by the hundred. The company doesn’t deliver merchandise to buyers, and it doesn’t guarantee whether the stuff actually works. Potential buyers register to bid online on SVD’s website, and once the auctions begin, they typically have from Tuesday to Thursday to make their offers. SVD runs 80 to 100 auctions a year, Carroll said, and winners are expected to pick up their gear in person from zombie office buildings or overflowing storerooms. 

Carroll, who said he helped sell off assets from more than 100 dot-com crash companies at a previous job, speaks with the quick voice of a longtime auctioneer. On the phone, he sounded sure of his company’s role in topsy-turvy 2024: “The business as a whole does good in a very good economy because people are buying new, selling their old — and in a bad economy, they’re trying to sell assets to survive.”

But many of Carroll’s clients are already dead. In the past two years, SVD has run auctions for a smattering of high-profile flops. Autonomous trucking company Embark collapsed in March 2023, a huge fall from grace after the San Francisco firm had gone public at a $5.2 billion valuation just 16 months earlier. First, SVD sold Embark’s office furniture and kitchen equipment. A few weeks later, the auction site offered a “short notice sale” with a “spectacular offering”: the company’s stock of super-expensive trucks, including 10 that were less than a year old. Computers and high-dollar networking equipment went in the next auction.

This past August, SVD ran an auction for defunct aircraft startup Universal Hydrogen. Two jet planes made the catalog, as did a forklift and a hydrogen fuel cell. That same month, lab-grown meat startup SCiFi Foods put its bioreactors, cell imagers and $20,000-plus freezer systems up for sale on the site after shutting down in June.

Carroll remembers a sale from 2022 as one of his favorites. The Arizona car company Local Motors had shut down and was trying to offload one of the world’s largest 3D printers, big enough to print a car. Local Motors officials were pessimistic that they’d be able to unload such a rare item, Carroll said, but SVD’s marketing arm ran a huge campaign and found a buyer in a week who paid three times more than Local Motors had expected. 

The large, shutdown-style sales, which Carroll described as “all assets between all four walls,” are common at SVD. They’re also hectic; Carroll said that high rents in the Bay Area make companies antsy to ditch their leases and get their stuff out “yesterday.” His staff visits offices and warehouses in person, takes photos, and starts building an online catalog from there. Speed is particularly important, he said, because failed companies often need cash to pay their employees for severance. SVD can hand over 80% of an auction’s collected proceeds within a week after the sale, he said, with the rest coming once the deals are finalized and assets removed.

Surplus auctions, where companies that are still operating find buyers for gear they no longer use, are less of a rush. But the amount of tech changing hands is still head-spinning, and the pieces are often odd. A scanning electron microscope was available in a July auction, and then hundreds of $380 speakers in August. A Montana firm offered 200 “e-trikes” in November. SVD’s near-monthly “Techfootin” sale series, which pulls from various companies for a single surplus auction, is on its 111th iteration. In the November installation, three Google Jamboards were on the low end of the offerings. On the high side: a temperature and humidity test chamber worth at least $6,000.

In Carroll’s opinion, these deals aren’t just for failing and frugal companies in need of cash. They’re also a crucial opportunity for the next round of upcoming startups to get gear on the cheap. He said several energy hardware startups have recently snatched up the leftovers of defunct predecessors, for example.

The market for battery manufacturing equipment, in particular, is so hot that SVD got pushed aside on a recent asset dump. The site ran two auctions for Cuberg, a San Leandro battery manufacturer that shut down in August, but lithium-sulfur battery startup Lyten, headquartered in San Jose, swept in and bought up Cuberg’s facility and manufacturing line before SVD could auction off the rest. Lyten Chief Sustainability Officer Keith Norman told SFGATE that his company, which is expanding its manufacturing footprint, was watching Cuberg’s struggles and was “eager” to get its hands on the battery cell-building tech.

According to Carroll, that type of thinking sets business-savvy tech veterans apart from their competitors.

“Most companies, to be honest with you, don’t have any plan,” Carroll said. “When you get your VC funding, you go out and you spend like mad, and next thing you know, ‘We’re running out of money.’ But had you gone and bought $200,000 worth of furniture from an auction, you could have saved $150,000.”

Hear of anything happening at a Bay Area tech company? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.