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Lowercase Capital Case Study: Chris Sacca, Midas List or Among The Gods Of Frauds?

Lowercase Capital Case Study: Chris Sacca, Midas List or Among The Gods Of Frauds?

March 26, 2016

This site often writes about the previously undetected pathological history of venture capitalists funding startup fraud, which caused the tech bubble to pop in 2008, and that costs employees their jobs, consumers/patients health and safety and long-term shareholders & taxpayers billions, while without accountability VCs are free to encourage, replicate and are rewarded for their fraud, known as The Sociopathic Business Model™.  Chronicled extensively  through my own personal story via:

Venture Capital, Incubator, Startup, Acquisition

sold in 2010

NEA & JJDC, ExploraMed, Acclarent, Johnson & Johnson’s Ethicon (purchased Startup Acclarent for $785 million)

Two former NEA JJDC, ElploraMed, Acclarent, Johnson & Johnson Ethicon executives were arrested, indicted on 18 counts of fraud and are currently awaiting their federal criminal trial on May 23, 2016, with the Honorable Allison D. Burroughs, in Boston.

The Sociopathic Business Model™ maintains that venture capital funded startup medical device industry is the little sister to venture capital funded startup tech industry, the only difference is the sales in medical device startups are in the hundreds of millions and in tech in the billions (unicorns).

NEA Funding Startup Healthcare Fraud Case Study-->

NEA Briefcase Johnson & Johnson Bayer Briefcase

NEA is Paid to Kill Women

NEA Venture Partner, ExploraMed Founder, Startup Acclarent Co-Founder, Josh Makower linked to startup healthcare fraud.  #Incubator #SlideDeck

Taking the Billion-Dollar Blinders Off Of Venture Capital:

Venture Capital, Incubator, Startup to Acquisition

NEA & JJDC, ExploraMed, Acclarent to Johnson & Johnson’s Ethicon

 

 

As much as I try and caution readers to take the billion-dollar blinders off of venture capital, because I too, was once blinded, it doesn’t help when The New York Times  publishes  the Top 20 Venture Capitalist’s in the World like it’s the second coming of Christ or, when not to be outdone, Forbes’ Midas List, which made the #CrimingWhileWhite hashtag, look like child’s play, does the opposite of taking the billion-dollar blinders off, in fact, it helps perpetuate the myth without exploring the real dangers the industry’s fraud poses to the rest of us.   And, let’s not forget the self-congratulating venture capital egos that can eclipse the sun, who humbly set Twitter ablaze.

The Sociopathic Business Model™ maintains that venture capital funded startups often disguise innovation as manipulation to evade the law putting their profits above employees, consumer/patient safety and at great expense to long-term shareholders (underperforming post-IPO or sale) and taxpayers.  So, it was interesting and timely when Lowercase Capital Chris Sacca was crowned beauty queen Midas List winner and sent out the following tweet:

 

Followed later by this tweet:

Here's pouting VC Chris Sacca's original tweet, complaining about those pesky little laws that prevent his genius.

 

Blocked by Venture Capitalist Chris Sacca 3 25 2016

#REDFLAG It’s never a good sign when someone in venture capital BLOCKS a venture capital whistleblower, because, it’s usually a #LightningRodToTheFraud.

Are Unethical Startup Venture Capital Firms & Executive #GodsOfFrauds Riding Unicorns at the expense of employees consumers investors & taxpayers

This isn’t about being right, it’s about doing what’s right for the benefit of the greater good and not just for the profits of a few, but again for the stability of many.  And, before Chris Sacca becomes blinded by the gold from the#MidasList, or before he humbly buffs up for the cover Muscle Fitness, let’s look at a few of  Lowercase Capital’s venture capital funded startups that either IPO’d or were acquired (or sold to an established conglomerate) for:

The Sociopathic Business Model™ Case Study: Signs Venture Capital Funded Startup Fraud:

(The accordion drill down below has all of the companies sold under Lowercase Capital per their website).

Let’s keep four things in mind first:

  • Underperformance post-IPO or sale is a sign of executive mismanagement stemming from venture capital
    • Likely claims of racism and sexism were ignored which is an indication of even greater unethical and or illegal activity.
    • False projections + Hypergrowth = Overvaluation = Fraud
    • Fraud is not sustainable sales model and not the fault of employees but rather is a sign of mismanagement
  • Employee layoffs are a sign of executive mismanagement stemming from venture capital
  • Underperformance AND employee layoffs likely confirm fraud from the venture capital-funded startup stage
  • Acquisitions mask fraud easier than IPO’s

Breakdown:

  • 32 Lowercase Capital venture capital funded startups IPO’d or were acquired (sold to a conglomerate)
    • 2 IPO’d (Facebook & Twitter)
      • Harder to mask fraud
    • 3o were acquired
      • Much easier to mask fraud and why most venture capital funded startups opt for this option
      • VCs get their 8-10 x’s ROI just as long-term investors start questioning underperformance

The Sociopathic Business Model™ has already written extensively about unethical and or illegal behavior of both Facebook and Twitter previously; and, one company that’s still on Lowercase Capitals’ current startup list, waiting (and waiting, and waiting for an IPO) Uber.  These three companies?  Textbook for The Sociopathic Business Model™.

Is this birds of a fraudulent feather?

Birds of a fraudulent feather?

Uber, which predictably will not be able to IPO anywhere near their current overvaluation (already rebranded, another sign of unethical and or illegal behavior) and will likely be acquired at a loss to investors.  Uber (founded in 2009) isn’t a unicorn it’s a dinosaur in terms of startups and should have IPO’d or been acquired long ago, which again is another RED FLAG, as is Uber’s CEO, Travis Kalanick blocking me on Twitter. I personally wouldn’t invest in Uber if someone else gave me money to invest specifically with that caveat.  

However, our focus for the Case Study is the two IPOs and  acquisitions:

The problem, looking at companies valued at billions and referring to them failures is hard; but, long-term fraud is costly for employees, consumers and investors, which is not the concern of VCs but, is, and should be a concern, for the rest of us. There is a similar pattern in acquisitions which is best explained by example, comparing the little sister to tech, medical devices to best illustrate the point:  Johnson & Johnson’s very public failing of startup medical devices underperforming post startup-acquisition finally caught the attention of investors; but, not for the right reasons. Clueless executives either fearful to keep their jobs masking fraud or who are completely inept blame everything but the actual cause: fraud.  And worse, Johnson & Johnson through their venture capital subsidiary (JJDC) is still funding people linked to medical device fraud.

Egos at the acquisition level  will not allow the perception of deception, so they’d rather not discuss how they were sold smoke and mirrors, allowing the venture capitalists off without accountability, free to replicate this cycle of fraud on another company.  Take, for example, Lowercase Capital’s startup Path social networking and CEO Dave Morin, who “agreed to” sell the company he started in 2010 to Daum Kakao Corp.; and, uncharacteristic of the industry, sold without a Silicon Valley parade in his honor or without disclosing the final sale amount, which are RED FLAGS. VCs & founders never miss the opportunity to tell you how great they are, unless they aren’t.  No disclosure of the final sale price should be illegal for a venture capital firm, in that that they’re still linked via other investments to the SEC.

It’s no surprise that Abc’s Shark Tank VC, Lowercase Capital founder Chris Sacca and Lowercase Capital funded startup Uber CEO Travis Kalanick, both blocked me on Twitter, their negative truth regarding their companies doesn’t reflect the golden touch of Midas, but more like they’re hanging with #GodsOfFrauds.

Lowercase Capital Sold-->

Let’s look for the RED FLAGS: And remember just because a startup is acquired or the CEO “agreed to” sell is not a guarantee that the exchange was profitable for investors.  Ego shrouds failure which is a manipulation of the facts to the public, meaning we’re not always getting the full story. And also remember if VCs sell at a profit we all hear about it, and when they don’t we don’t.  Look for reputable articles to cover the acquisitions.

1000 Memories (Doesn’t link to any acquisition information or sales figures)
Acquired by Ancestry.com
280 North (Deadlinked)
Acquired by Motorola in 2010 ($250,000 seed)
A quick Google search finds: Motorola Snaps Up 280 North for $20 million
RED FLAG:  Why wouldn’t Lowercase Capital’s site link that information directly? That’s a HUGE ROI for VCs
If a company overpaid for a vc-funded startup, layoffs six months + post acquisition is a good indicator 
RED FLAG: Motorola layoffs, or restructuring (another word for executive mismanagement)
This is where the blame game starts from executives who may not know they purchased smoke and mirrors and blaming employees for underperformance is the management style with the failure to recognize mismanagement started likely when they purchased the startup. This is the cause of layoffs. 
RED FLAG: It goes back to false projections to create the appearance of hypergrowth to achieve an overvaluation is not a sustainable sales model because it’s a sales model based on fraud.  I do not know that to be the case here.
RED FLAG: This requires more digging to ultimately decide if this was just good for the VCs and bad for the long-term employees and investors, or not.  This information is tougher to find post-acquisition, often times the company doesn’t share this information or folds it into an existing subsidiary. Internal employees (not management) there during the acquisition are always the best source of honest information.   
About.me
Acquired by AOL 2010 Raised $425,000 estimated ROI $15-$20 Million 
About.Me CEO Tony Conrad: Here’s Why I Sold My Company To AOL So Quickly
RED FLAG: “First, because while he had already had profitable “exits” before, and doesn’t need the money, other members of the About.me team had not.”
RED FLAG: Let’s assume that AOL bought About.me for somewhere between $15 million and $20 million. Based on the fact that it had raised $425,000 from its investors (including AOL), assuming a roughly $2 million valuation, that’s a quick 7-10X multiple.
RED FLAG: 2011 AOL lays off 20%  of total company
Adgrok
Acquired by Twitter
Auctomatic
Acquired by Live Current Media
Backtype
Acquired by Twitter
Backupify
Acquired by Datto
Chill
Acquired by Tinder
Batch/DailyBooth
Acquired by AirBnb
Big Frame
Acquired by AwesomenessTV
Cabana
Acquired by Twitter
Cardpool
Acquired by Blackhawk Network/Safeway
Clickpass
Acquired by Yola
Embark
Acquired by Apple
Facebook
Acquired by Joe Public
GoPop
Acquired by Buzzfeed
Gowalla
Acquired by Facebook
Heroku
Acquired by Salesforce
Instagram
Acquired by Facebook
Locu
Acquired by GoDaddy
Milk
Acquired by Google
Omnisio
Acquired by YouTube
Path
Acquired by DaumKakao
Posterous
Acquired by Twitter
Photobucket
Acquired by Fox Interactive Media
SimpleGeo
Acquired by Urban Airship
Someecards
Acquired by Management Buyout
Tello
Acquired by Urban Airship
Twitter
Acquired by Joe Public
Typekit
Acquired by Adobe
UpNext
Acquired by Amazon
Zencoder
Acquired by Brightcove

 

Test your skills: Track some of these current Lowercase Capital funded startups and see how many (IPO-harder to do if fraud based sales) and how many sell or are acquired and look for the fraud #RedFlags along the way.

Lowercase Capital Currently Funded->

AeroFS
Sync all your stuff, with or without the cloud.
Artillery
The browser is the game console.
Automattic
Passionate about making the web a better place.
Bellhops
Trusted hands to help you move.
Binti
Helping parents adopt.
Bit.ly
Shorten, share, and track your links.
Blue Bottle Coffee
The craft of coffee.
ChartBeat
Who is on your website right now?
Crowdrise
The most effective way to raise money for your charity.
Din
Recreate restaurant dishes at home.
Docker
Build once, run anywhere. Configure once, run anything. 
Envoy
Helping hands for elder care and independent living.
Electric Imp
Connect anything to the Internet wirelessly.
Embed.ly
A platform that makes embedding and previewing links simple.
Fanbridge
Nobody brings musicians, athletes, and brands closer to their fans.
Getable
Construction equipment networked.
Gimlet Media
High-quality, narrative podcasts.
Gumroad
Sell directly to your audience.
Happy Home Co.
Home managers for everyone.
Heavybit
Improving developer cloud services technology.
Hinge
Great dates thanks to shared friends.
InVenture
Unlocking financial access for all.
Jobr
Job search for the swipe generation.
Kickstarter
The world’s largest funding platform for creative projects.
Liftopia
Buy ski lift tickets in advance and save bigtime.
Lookout
The very best way to keep your mobile devices safe.
Lumi
Customize and brand physical goods.
MakeSpace
Full service storage of your real world stuff.
Mark43
Next generation law enforcement software.
Medium
Everyone’s stories and ideas.
Message Bus
Secure, scalable enterprise message delivery.
Mindie
Mesmerizing music videos.
Mobcrush
Live mobile game streaming.
Motion DSP
Software that dramatically improves video quality.
Next Games
Creating the next generation of epic mobile games.
Next Wine LLC
Wine is a grocery, not a luxury.
9gag
The world’s most popular humor site.
Noun Project
Visual language through icons.
Omnity
Unearth actionable insight.
Optimizely
Now anyone can do A/B testing.
Parenthoods
Local parents like you.
Path Intelligence
Bringing online intelligence to the offline world.
Playground Theory
Games have never done this before.
Ranker
The best and worst lists of everything.
Poll Everywhere
Instant audience feedback.
Quirky
Retail products sourced from users themselves.
RecordSetter
The new home for world records.
RescueTime
When you are ready to get serious about productivity.
Reserve
A better dining experience.
Slack
Be less busy.
Snowball
All your messages in one place.
Streak
Manage customers inside Gmail.
Stripe
Web and mobile payments for developers.
StyleSeat
Find and book beauty and wellness professionals near you.
Sutro Health
Mobile workflow for health care.
Swipely
Understand and grow your small business.
Threadflip
A new way to discover, buy, and sell fashion.
Tred
Test drives delivered.
Triposo
Free interactive travel guides for mobile.
Trokay
The world’s best mountain-town restaurant.
Twilio
Infrastructure APIs to build voice and text apps.
Uber
Lifestyle meets logistics.
Urban Airship
Powering engagement for the world’s most successful apps.
Veggie Grill
Redefining American comfort food, 100% plant-based.
VHX.tv
Distribute your film directly to your audience.
Victorious
Mobile video networks done right.
VidIQ
Video marketing for brands and entertainers.
Vidme
The fastest way to share video.
Webshots
Beautiful, high resolution photographs for your desktop.
Wizeline
Only build the products your customers will love.
Younity
Your personal cloud.
Zen Marketing
Better lead generation.

*Lowercase Capital is one of many venture capitalists who fund each of the startups listed; however, for this Case Study we looked at just Lowercase Capital as a means to help employees, consumers, patients, or potential long-term investors understand the process as it possibly relates to unethical and or illegal behavior to prevent job loss or fraud. It’s up to each person reading to look at the facts and make the best personal and professionals decisions based on what is best for themselves or their families.

 

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