Private companies rarely advertise their restructuring efforts, financial difficulties, or failures. But OffRoad Capital's quiet demise is especially interesting in light of its management's vocal support of increased public disclosure in the private equity industry (see "Susan Woodward sheds light on private equity").

It seems that limited interest in OffRoad's model drove the company off the road. It set up an online venture capital network that syndicated funding for prescreened startups by gathering cash from high-net-worth investors. Competitor Garage.com saw the writing on the wall in time to morph into a boutique investment bank.

Within its first two years, OffRoad used its network to help raise nearly $200 million for 13 companies and one venture fund -- including $17 million of its own funding, which totaled more than $76 million from Mayfield, Robertson Stephens, Charles Schwab, and dozens of individual investors.

What OffRoad didn't see bearing down on it was the overall slowdown in private equity investing. In February, it laid off 41 of its 120 employees, mostly in the member relations department. "The everyday millionaires that OffRoad really began offering our deals to are hibernating," company spokesperson Pat Harden said at that time.

Even an attempt to move from a Web play to a financial services software model didn't catch on with financial institutions, according to a source close to the company. There was some interest among investors to do a new round at a lower valuation, but OffRoad's shareholders couldn't come to an agreement about it, the source says.

According to a letter sent to shareholders, which Red Herring read, OffRoad appointed distressed-asset manager Richard Couch (managing partner of Diablo Management and executioner of Pets.com, among others) as director and CEO in early August. Once the board and management resigned and all employees were terminated, Mr. Couch was charged with finding a buyer for the company or its assets. As of mid-September, OffRoad was trying to sell its assets and avoid bankruptcy.