The fake vc

http://www.shaf.co/post/75399291209/the-fake-vc-eccentric-german-millionaire-and-the

by JayEnn • 12 years ago

72 16 12 years ago

Dartanion7• 12 years ago

This is absolutely insane. Why not out Fredo publicly?

loceng4• 12 years ago

It's a tough call. The behaviour isn't acceptable, and it's in fact very harmful to others - and he'll continue to do it to others until he can't. When he can't will likely be determined by a) jail time, though I'm not sure any of the behaviour mentioned is actually illegal, or b) that he has no options for work and job offers and no other possibilities because his credibility is shot. Of course from my own experience with people who are like this, they burn their bridges locally - and then just move to a different city where they can be and act however they want again.

auvrw• 12 years ago

my own experience with people who are like this

have you met many of them? i mean, perhaps some people oversell themselves, some might even tell outright lies -- but this guy fabricated entire identities.

i'd like to think that this is not exactly commonplace.

but if it really is, then this kind of thing more common in the tech industry, or does pretty much everything with a "business" angle attract a few people like this?

ezrameanshelp• 12 years ago

Wait, all those reasons seem to point to it not being a tough call at all. The only reason not to would be fear about retribution. If you don't warn others, you are responsible for the ill that befalls them. Am I missing something?

shaf3• 12 years ago

Hi Dartanion7, I wrote the post - the only reason I haven't outed him is not to protect him but he scammed a couple of other people I know too. They have developed serious anxiety and trust issues due to him - I want to protect them form being outed as a 'victim'. I don't feel it is my call to do that. However saying that, I have left enough evidence in the post for readers to put the pieces together themselves.

netman21• 12 years ago

This brings back very uncomfortable memories. When I was 25 I was helping a friend who was creating the first structural analysis software for the PC. I introduced my friend and his partner to this strange guy in Dearborn, Michigan. There were meetings at the airport and in his office in Dearborn. This guy claimed to be a wizard at arbitrage and arcane financial instruments. He said he worked out all the algorithms for Ford Motor for hedging copper futures. He was overweight, had greasy hair, and, I kid you not, his back pockets were usually turned inside out. We figured, eccentric genius. At least at first. All he ever provided were excuses. He was waiting to flip some sort of bond issue overseas that would give him $10 million, etc. That business never got off the ground.

Then a year later my own partner and I got a call. We had been looking for a manufacturing business to acquire. The crazy guy had a contact in Chicago who was looking for an operations team to come in on a deal to acquire a manufacturer of audio mixing boards. This company was still run by the founder who had practically invented the industry. There were 50 employees and customers included major studios and venues around the world, including the US Senate and the Kremlin. The deal maker, lets call him DB, proposed that each of four partners -the founder, me, my partner, and him- put $25K into a holding company. He would arrange a $250K line of credit from the Korean bank in Chicago that he was friends with. Then we would operate the company out of bankruptcy. Well we three each sent him $25K (my dad lent me the money). We did all the legal paper work, and I showed up the next day as one of the new owners of a $3 million/year company. Very exciting for a 27 yr old. To make the story short. DB was a complete crook. He needed $75K to pay off someone else he had screwed and was threatening his life. The business shut down. 50 people lost their jobs. It took me years to get back on my feet financially.

shaf3• 12 years ago

I'm the author of the blog, I'm sorry to hear that. It sounds an order of magnitude worse than my story. Luckily I didn't outlay any money or hand over any important documents. It sounds like you should share your story too - I wonder if there's a place somewhere people can share startup horror stories?

tsunamifury• 12 years ago

The Valley has been filled with these types since it became known for loose money and fame. I've met perpetual VCs without money, Founders with no real startup other than a logo and domain name, and name-dropping nobodies since they first day I came here.

In general be suspicious of flakiness and an inability to meet any agreed upon timeline, and always validate information in person when possible. Even if they are real and show these attributes, you likely don't want them involved with your business ventures anyways.

AndrewKemendo• 12 years ago

None of these questions or tactics will be offensive to real angel investors. In fact, they will give the real ones more confidence in you.

This is a big sticking point for first time founders because it by definition turns the tables and now the founder is the one who is challenging the supposed expert investor.

This can be tough for people to do if they aren't used to it.

danaseverson• 12 years ago

What a fascinating story. Thank you for sharing it.

I totally hear you on fact that it was hard to see at the time, but obvious now. You want to believe, which completely messes with your mind.

shaf3• 12 years ago

Thank you for reading it. It was very cathartic writing it, I'm just as confused as I was then but at least I can take lessons from it and share with others.

The fake vc

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