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Snarky comment about LLCs being able to shirk responsibility by just going bankrupt... But really this seems like a basic class-action fraud suit on what they hoped would be a bootstrapped ponzi-scheme. (Spend enough, fast enough to get enough customers to be able to actually deliver your product) but not keeping at least enough money in reserve to make minimum refunds is a major liability.
Here is the original interview: https://www.youtube.com/watch?v=RwRZtZQoLtQ
Just wait until the scooter companies and operators get nailed with an injury class action lawsuit. A good friend was seriously injured on a rental scooter, going 2-3 mph, catapulted onto her face, ended up with brain damage and multiple facial fractures requiring reconstructive surgery. A high school physics student could work out that tiny wheels combined with a high center of gravity is a bad combination.
Everybody knows that nobody wears a helmet while riding scooter company. The manufacturers know, the ride-sharing services know, and the riders know. But if a helmet warning is clearly displayed, that gives the scooter company virtual legal immunity from injury lawsuits.
Even if the scooter's unsafe with a helmet, the situation prevents any serious legal damages. Only a small minority of riders will actually wear the helmet, and the company can just settle with on an individual basis. This pool is too tiny to attract high-powered class action attorneys.
The vast majority of riders, and therefore injuries, will be helmet wearing riders. Proving the counterfactual that they would have sustained the same injuries even with a helmet is very difficult. Head injuries by far are the highest damages, so again the pool of non-head injuries is too small to attract serious class-action attorneys.
Earlier quoted context omitted.
A class action lawsuit against who? You cannot sue a company that no longer exists. It is unlikely consumers would be able to defeat limited liability, particularly with the argument that "the company should have allocated resources differently."
If you could prove deliberate fraud, which seems unlikely, then you could probably pierce the limited liability shield. Seems unlikely though.
It is, however, very unlikely that anyone ever gets their money back.
Earlier quoted context omitted.
A class action lawsuit against who? You cannot sue a company that no longer exists. It is unlikely consumers would be able to defeat limited liability, particularly with the argument that "the company should have allocated resources differently."
An LLC does not protect one in cases of fraud. IANAL, but I believe the practices of Unicorn may constitute fraud under a legal definition. In such a case, Nick Evans would be personally liable for damages.
If the bar for fraud was set that low, I bet half of failed startups would be considered "fraudulent." More than half if you look at restaurants.
> Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage.
Unless you have some damning email or other disclosure you'd never be able to prove that they knowingly sold scooters they never intended to fulfil, therefore fraud is out. In fact all the evidence seems to indicate the opposite, that their long term goal was to make this a successful business and grow until the money ran out.
If you give $700 to a company that promises to deliver a scooter, and they spend that money on advertising, that’s fraud. They have no plausible argument that they didn’t know they couldn’t deliver or refund customers after they started spending pre-order funds. I hope customers get successful chargebacks and there’s a class action lawsuit. This wasn’t a crowdfunding campaign. Consumers were lied to, and the law shou…
From tile to scooters to blowing money on FB ads - seems like a bizarre path for an experienced (?) developer.
I have read people say that a key difference in entrepreneurship in the US versus European countries is that European company founders are much more likely to be held responsible for their companies' debts and are therefore much less likely to experiment with new businesses at the rapid pace we see in the US. Would that have been true here? If a German startup had raised $150k in venture capital and taken $250k in or…
There are different forms of companies in Germany (GbR, UG, GmbH,...) some of which require personal liability and some which don't (to some degree). E.g. a GmbH is a limited-liability (at least 25k €). BUT the CEO has to act with diligence. Otherwise (e.g. acting with negligence) they are liable with all of their personal assets. In my non-expert eyes, the CEO of this company would be liable even under the shield of a GmbH.
If you give $700 to a company that promises to deliver a scooter, and they spend that money on advertising, that’s fraud. They have no plausible argument that they didn’t know they couldn’t deliver or refund customers after they started spending pre-order funds. I hope customers get successful chargebacks and there’s a class action lawsuit. This wasn’t a crowdfunding campaign. Consumers were lied to, and the law shou…
You're not wrong, you're an idealist, which typically are very closely intertwined when it comes to reality. If you gave $700 to a company who promised to deliver you a scooter a few years down the line if all of the dominoes fell exactly as planned... I would argue that you got what you paid for even if it amounts to nothing tangible in the long run. Which is to say, you paid for a pricey digital lottery ticket with…
Tons of billion dollar projects, let alone those with only a few million, have been delayed for years, changed half way through, or have died before finishing.
The failure rates for new businesses is pretty high, 50% in the first year.
One could question if its moral to take early preorders without some form of insurance but at the same time a ton of good things have come about using this process and proper communication by the company/purchasing platform can mitigate most of these issues.
Plus it’s pretty rare for people to being giving hundreds of dollars, let alone almost $1000, to an unproven product so it’s probably best not to judge based on the extremes.
Obviously if shady stuff is going on and there’s some evidence the company didn’t meaningfully try to accomplish the goals for which it raised money and misused company funds for personal benefit then there’s a serious problem. There's plenty of laws in place for that already.