11–20 of 194 posts
> Although investors should be doing more diligence than is currently in fashion, this issue is on the founders to fix. What incentive do founders have to "fix" this when investors aren't doing adequate due diligence?
>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.
Not sure if there's even been a case of a white-collar/financial negligence charge being considered a felony or not though...
Either way, I think sama's point was that this stuff can be A Big Deal and is really important. I don't think any of this discussion contradicts that.
>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.
From model jury instructions, which might be misleading here: the "intent" a prosecutor needs to establish is that you knowingly said something false, in the process of seeking something of value, that the falsehood was material to the decision of whether to give the thing of value to you, and that the other party later gave you that thing.
The bigger issue is it's very very very very very unlikely that a tiny startup is going to be prosecuted for attempting to defraud an accredited investor.
>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.
> Although investors should be doing more diligence than is currently in fashion, this issue is on the founders to fix. What incentive do founders have to "fix" this when investors aren't doing adequate due diligence?
>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.
But even without intent, negligence can, at times, rise to the level of being criminal[1]. Not sure if there's even been a case of a white-collar/financial negligence charge being considered a felony or not though... Either way, I think sama's point was that this stuff can be A Big Deal and is really important. I don't think any of this discussion contradicts that. [1]: https://en.wikipedia.org/wiki/Criminal_negligen…
Sam didn't claim that though, he specifically claimed that unintentionally stating incorrect jargon is a felony crime called 'fraud'.
That is incorrect and somewhat ironic in a post about using correct terminology.
>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.
Here's the biggest offenders I see when talking to founders: revenue vs GMV (if you give GMV, give me your cut/margin) contract vs LOI burn vs expenses users vs customers (customers pay) signups vs users vs active users (you should give active with time interval and measurement of active. eg. logged in last 30 days) profitable vs cash flow positive Others people should know: diff between retention rate vs churn rate…
EDIT: Clearly I have no understanding of fraud.
>This is a felony and it’s called fraud, even though it’s usually unintentional. This is incorrect. Fraud requires intent. Otherwise it's just negligence. Should probably throw a legal dictionary in with the financial one.
Financial Intelligence (http://www.amazon.com/Financial-Intelligence-Revised-Edition...)
Financial Intelligence for Entrepreneurs (http://www.amazon.com/Financial-Intelligence-Entrepreneurs-R...)