The turnabout came one day after a financial crisis erupted at NetChannel when negotiations to sell the company to America Online stalled, putting dozens of jobs in jeopardy. As reported earlier, many employees said they had packed their belongings in preparation for layoffs.
"The entire investor body stepped up to the table," said David Atkinson, cofounder and chairman. "Why would our investor body do this unless they believed we have a great market opportunity and our current partners look to NetChannel to be the viable competitor to Microsoft's WebTV?"
Privately held NetChannel provides Net access through TV set-top boxes. These devices are becoming more common but have yet to gain any wide market acceptance, and NetChannel already faces formidable competition from WebTV.
NetChannel is backed by venture capital firms and corporate investors. AOL is not included among the corporate investors in the company, Atkinson said.
He declined to elaborate on the size of the funding by the investor group. And although this funding addresses NetChannel's immediate cash needs, it does not mean that the company is out of the woods.
Philip Monego, cofounder and chief executive, said employees returned to work today at each of NetChannel's three offices. "Some people packed up their things [yesterday], but everyone is back here today, and it's business as usual," he said.
The deal with AOL could be resuscitated, sources said, but many of the company's roughly 100 employees were confused and concerned about their fate yesterday.
In November, NetChannel struck an agreement with AOL that called for the online giant to keep funding the start-up until an acquisition was completed, said one source familiar with the talks.
Earlier this month, however, AOL withdrew its agreement and indicated that it would put together a revised buyout plan by mid-March. That did not materialize, and negotiations broke off late Monday night.
But the deal could be revived. Monego's actions at yesterday's staff meeting may have brought AOL back to the bargaining table, a NetChannel source said.