Why did Revel (maybe) go Bankrupt?

Hours ago it was announced Colorado based Revel Bikes had turned operations over to their senior creditors (they went bankrupt). I wrote this for a group of bike nerds I love (and subsequently deleted) but felt it fit the backdrop of my blog well enough so am posting here instead. If anyone wonders why I care, the real answer is things like this really do break my heart and give me a bit of angst. To see a company, with jobs tied to it in a tough-to-find-a-job kinda place, go belly up – is saddening. If someone might be able to learn from something I write, its worth it. So here ya go.

Revel Bikes Is Closing: Some Hard Truths and a Few Thoughts

I’m going to do something a bit tactless here and offer my two cents, despite not knowing every detail (which makes the speculation even more reckless). But before I dive in, a disclaimer: I’ve made plenty of mistakes in business. It’s part of why I feel comfortable saying anything at all. I’m not God’s gift to bikes or startups (clearly). We all get things wrong. We all need luck. And to anyone at Revel who put in real effort only to end up here—I’m genuinely sorry. That sucks. I’d be the first to buy you a beer (or three) and really respect the work you did.

That said, here’s my read from the outside looking in:

Debt

The company says it defaulted on $8M in secured debt. What was it secured against? Inventory? Real estate? Tooling? Personal property? No idea, but it matters. They also have unsecured creditors (think credit cards and vendor lines), which are probably going to zero. Is $8M a lot? Depends on prior financial data/profitability, what that debt was used for, and what risk-adjusted returns they were chasing. But just gut-checking this against other industry balance sheets, it’s a lot, especially for a company without real scale or dominance in any one product category. To put this into real terms, if the debt was financed at 8% (guessing, but this is likely optimistic) that is $640K a year in interest expense, $53K a month or roughly ~27 bikes if they are making $2K per bike sold. JUST TO COVER THE DEBT (edit – interest expense) . I know, the idea is you sell a lot of bikes this time of year, pay down the debt, and the interest expense also goes down, but I’m just trying to illustrate how delusional you have to be as an operator “in this economy” to do such at thing.

Equity

We don’t know how much equity was invested, but it would be interesting to understand whether this was a debt-heavy business from the start or if they also burned through angel/seed capital. In a bankruptcy, equity holders are last in line, so they’re probably wiped. This point is academic, but still worth noting.

Headcount

Their website (now down) showed 25 employees stateside, plus 6 more overseas and a CFO. That’s egregious. I don’t care what anyone says this is way too many people for a brand that hasn’t hit product-market fit or reached scale. There are billion-dollar tech companies running leaner than that. And in this macro environment high interest rates, a soft consumer, and brutal competition you simply have to be lean. Every hire needs to be justified ten times over.

Ironically, I remember DMing them when they were hiring for a salaried role that seemed like a stretch for both the company and the Carbondale cost of living. I suggested hiring a part-time contractor instead. They never should’ve brought 30-70% of what they did in-house. It’s a death sentence when you haven’t de-risked the business. Now maybe they’d quietly trimmed staff and they hadn’t updated their website prior to this announcement today, but its extra disheartening to see C-level people not take the steps to keep things afloat (CUT! You have to) and instead tank the whole thing without doing something. 

To put this headcount in context, and the challenges it presents, if we average out the ~30 employees at $50K/yr (which is likely low) that equates to $1.5M/yr. Again, using our above math of ~$2K profit per bike (which is likely high) then that means they have to move 750 bikes to merely cover their employee count which brings the total to ~1,070 bikes (using very crude math) to just cover interest expense + employee salary. Even if I’m off be a factor of 2, or even 3, that’s a chunk of bikes to sell as a smaller company to get to something close (but not all the way to) breakeven. (those playing along at home, we’re still not factoring in a number of other factors, like paying down that $8M note).

Product Strategy

Honestly, I’d ride every bike in their lineup. I liked what they were going for, especially with the new models. But there wasn’t a bike in the mix where I thought, “I need that.” Their value prop always felt vague—caught somewhere between Yeti (brand equity powerhouse) and a bunch of slightly cheaper, performance-focused competitors. That middle ground is brutal. And bikes aren’t like tires or shoes—consumers don’t buy new ones every year.

Revel was trying to break into a crowded space, at a premium price point, without a clearly differentiated product. But ironically, the most recent stuff they were working on looked promising. If they had bought themselves more time, run leaner, made sharper bets, they might’ve quietly carved out a sustainable niche. This is SO TRAGIC TO ME and makes me sad. 

The rough gameplan I’m defining wouldn’t be sexy. It wouldn’t be fast. It wouldn’t even be a good use of time for someone smart in literally any other industry. But it could’ve worked.

Final Thoughts

From the outside, Revel looks like the exact kind of company you’d expect to fold in 2025. If you’re outdoor business is in a similar position, here’s the bitter truth: you need to act decisively before the walls start crumbling.

• Cut headcount aggressively if you aren’t profitable, growing or default alive.
• Kill products that don’t move the needle. This is hard, but mandatory.
• De-risk your burn by leaning on vendors (design, marketing, engineering – outsource when small).
• Be specific. Be lean. Be boring. (until you have PMF)

Feel free to contact me if you want to chat – Jeff.Brines@gmail.com