Losing our business – we didn’t see it coming • Hacker News Board

Re: Losing our business – we didn’t see it coming

#51

Post by jarsin » Mon, Aug 01, 2016, 7:45 PM UTC

tag2 wrote: post #40

It's difficult to see the logic that some of these guys have with their "investment" cons. I really wonder the psychology of someone who'd go through a fake investment proposal like this. Do they just want to feel important? I recall a similar incident with someone on HN that I have saved from a few years back: http://www.shaf.co/post/75399291209/the-fake-vc-eccentric-ge...

I was introduced to the world of fake house offers sometime ago. I could not believe that there are people in this world that literally have no job or nothing and go put offers on expensive houses. After it happened to me twice one of the title workers told me they see it everyday and many of these people do it repeatedly.

Re: Losing our business – we didn’t see it coming

#52

Post by greghendershott » Mon, Aug 01, 2016, 7:46 PM UTC

apatters wrote: post #44

I think the most important lesson here is that you need to have really good accounts receivable to survive in business. In a small business AR is a founder/owner-level concern. You should spend some portion of your time personally making sure you get paid--on time! If you manage your receivables actively then you become aware very quickly if someone doesn't pay on time. This flushes out fraudsters, keeps you directly…

Exactly. I actually used Quicken in my startup's early days. Naively. And fortuitously. Even after we switched to real accounting software, I would focus first and mostly on the cash flow statement and similar metrics.

Many things might someday be cash -- an invoiced sale, an A/R balance, an investment term sheet. Or they might not. Meanwhile they're only promises or futures -- worth nothing if the company abends due to a SIGKILL. A small business is very much an exercise in blocking I/O. :)

Re: Losing our business – we didn’t see it coming

#53

Post by GrinningFool » Mon, Aug 01, 2016, 8:06 PM UTC

Disruptive_Dave wrote: post #50

WhitneyLand wrote: post #46

Earlier quoted context omitted.

Totally disagree that this is "damage control". It had all the signs of a good faith postmortem that others can learn from.

This was not a post written as "We were naive and unprepared and suffered the consequences" but rather "look at all these bad things this bad man did to us, the victims, and oh yeah maybe we could have done something better at some point."

> Since then we’ve been making sure that we could dissolve the company solvently by covering the debt personally.

Actions louder than words, etc. After reading this, there's no question that they're shifting a lot of the blame to Simon, but to me this action also shows they're aware of their own culpability in allowing it to get to that point.

Re: Losing our business – we didn’t see it coming

#54

Post by VLM » Mon, Aug 01, 2016, 8:30 PM UTC

gnaritas wrote: post #19

beachstartup wrote: post #4

Earlier quoted context omitted.

there's nothing to "understand". you assume there is a logic to their actions. there isn't. the guy was a scammy bullshit artist, a wannabe business man who talked his way into others' confidence, and probably has mental issues. these people are out there, and you need to watch out for them. on a side note, it takes guts to post a story like this. most people don't admit when they are taken like this. they're lucky h…

There was logic to his actions, he stole their ad revenues and kept the money while dangling a carrot of big investment to keep them from noticing. Scammy bullshit artists still have goals.

Something relevant to keep in mind is the scammer is not obligated to have a one track mind. He has 25K of their money, as far as I can tell still has it and based on the guys history has run this many times. He can run this scheme in parallel perhaps 10 companies and for 9 he disappears and the tenth he spends 250K and owns a chunk of a "4M company". Note that he ran for the hills when he got in over his head and figured out that giving a "4M company" that folds when it loses 25K is probably not a good use of 250K. Some other company will be getting that 250K.

Re: Losing our business – we didn’t see it coming

#55

Post by johnwheeler » Mon, Aug 01, 2016, 8:59 PM UTC

WhitneyLand wrote: post #45

themgt wrote: post #5

That week was fraught, as it was the week of a major conference that we were working with. It was the first time we were displaying adverts on someone else’s site through our system, but we couldn’t trust Simon — we had no guarantee that he wouldn’t try and display something malicious. We had to rebuild the ad system from scratch to ensure that no one could maliciously inject adverts onto our system. It was too much…

All the criticisms in and under your post are valid, but should be taken in context. If you haven't started a company and raised money for it, I can tell you there are a staggering number of ways to make mistakes. I asked investors for references and actually called them before signing, but at the same time no doubt made mistakes that others wouldn't have. The takeaway should not be these these guys were stupid at fi…

There are a staggering number of ways to crash a car, yet driving with a blindfold doesn't absolve you of culpability there either.

Re: Losing our business – we didn’t see it coming

#56

Post by Disruptive_Dave » Mon, Aug 01, 2016, 9:04 PM UTC

GrinningFool wrote: post #53

Disruptive_Dave wrote: post #50

Earlier quoted context omitted.

This was not a post written as "We were naive and unprepared and suffered the consequences" but rather "look at all these bad things this bad man did to us, the victims, and oh yeah maybe we could have done something better at some point."

> Since then we’ve been making sure that we could dissolve the company solvently by covering the debt personally. Actions louder than words, etc. After reading this, there's no question that they're shifting a lot of the blame to Simon, but to me this action also shows they're aware of their own culpability in allowing it to get to that point.

No doubt they've learned a damn good lesson that they'll probably only need to learn once.

Re: Losing our business – we didn’t see it coming

#57

Post by exolymph » Mon, Aug 01, 2016, 9:10 PM UTC

A comment from one of my Facebook friends: "No offense to the guy or his partners, but his whole story is like an advertisement not to invest with his next venture. Maybe the next one down the line."

I agree.

Re: Losing our business – we didn’t see it coming

#58

Post by epicaricacy » Mon, Aug 01, 2016, 9:25 PM UTC

brianwawok wrote: post #2

I literally do not understand. What is the other side of the story? Why would someone go through all this trouble of a fake investment? Clearing buying 10% of a company for 200k with no check is a game that only lasts for a few weeks???

They ran his ads for weeks. He got all the advertising revenue.

Re: Losing our business – we didn’t see it coming

#59

Post by jdmichal » Mon, Aug 01, 2016, 9:32 PM UTC

khuey wrote: post #42

pessimizer wrote: post #23

Earlier quoted context omitted.

Why would they tell employees? They're not going to be held personally responsible for not paying them; it's the fault of a mailbox in Delaware.

Officers and directors can have personal liability for unpaid wages.

Unpaid wages is a different situation. A company running out of money and "suddenly" laying everyone off and winding down does not necessarily mean that there are unpaid wages. In this case, the article makes it seem that there was never a point where employees were working without the ability to continue paying them.

Re: Losing our business – we didn’t see it coming

#60

Post by dragonwriter » Mon, Aug 01, 2016, 9:36 PM UTC

nullcipher wrote: post #9

Why do companies wait till the dying moments before informing employees? I have seen many articles now which read like 'we went to back to the drawing board to realize that we have to close down in 2 days. Our bank was empty'. Is this just dramatization? I cannot believe people can run business without something so basic. Like paratroopers jumping out of an aeroplane and then saying 'we checked before hitting the gro…

> Why do companies wait till the dying moments before informing employees?

Because the "dying moment" is, almost by definition, the point at which you determine you have no viable route to get new funding or restructure to keep the business a going concern. Any earlier notification to employees means that employees started fleeing ship for safer shores -- especially the most employable with the best outside options -- undermining your efforts to find a way to save the company as you lose key staff.