Mbloom’s first investment is in themselves?

http://www.alohastartups.com/2014/07/12/wtf-mblooms-first-investment-is-themselves/

by shuzchen • 12 years ago

77 29 12 years ago

shuzchen3• 12 years ago

Hard to see how this passed anybody's internal alarm that warns them of impropriety and conflict of interest. As a developer living in Hawaii that dreams of building my own company one day (and dreams of building that company in Hawaii), this doesn't look good for our ecosystem.

Cached version here: http://www.alohastartups.com/2014/07/12/wtf-mblooms-first-in...

Other writeups on this issue: http://www.hawaiiweblog.com/2014/07/10/mbloom-funds-mbloom http://www.civilbeat.com/2014/07/civil-bytes-is-there-a-conf...

jpgvm• 12 years ago

Yeah, no way to destroy good-will like corruption. :(

manachar3• 12 years ago

Ugh. I live on Maui and wish there was a better tech eco system on the island for many reasons.

I often get the feeling that this sort of self-serving entrepreneurship seems somewhat standard on the island. Some of it is just the "small town" and insular nature of the business scene here, but sometimes I wonder if there's something more malicious to it.

ChuckMcM• 12 years ago

What would a better Tech eco system look like?

Prototype manufacturing plants need a source of material having to fly things in automatically makes them more expensive.

Software companies need engineers but engineers typically go to where the jobs are. So until there are jobs, there are few engineers.

Infrastructure companies need startup companies that are being created to keep the gear around so that they can help build infrastructure.

Entrepreneurs need a source of capital that understands both the opportunity and the risks. They need banks that also understand the opportunity and the risks.

What is the current connectivity solution for Maui? Is there 10gbit connectivity back to the mainland? At what cost per Mb? Any local data centers?

What are the minimum taxes on a business in Hawaii? What are the minimum compliance regulations?

Is there an advocacy group, something like the Chamber of Commerce which has a whitepaper (should have answers to some of these questions in it)

alphonse232• 12 years ago

Local Mauian, born and raised, moved to the mainland, and now working as developer in Los Angeles -- I know that place first hand -- nobody there is looking for change -- you can't fight the culture there (probably more there than other small towns), no manner how hard you want it to change.

samstave4• 12 years ago

They are BOTH registed as oficers of Flikdate:

     Officers

         NAME sort	OFFICE sorted help	DATE sort

      BICANIC,NIKOLA 	P/D 	Mar 6, 2014 
      KRYEZIU,ARBEN 	S/D 	Mar 6, 2014

Also, both Ozolio and Flikdate have their registered offices in the same building.

So these crooks were able to fund their crappy startups with 700K out of the fund, giving them selves 7% overall of the fund.

Lets see what they spend that money on.

hisabness• 12 years ago

isn't it possible they received the money from the state with the understanding that a portion of it would be invested in startups of which they were owners?

downandout• 12 years ago

Perhaps the most shocking part isn't that these investments were made, but that taxpayer money went into a fund where there were no bylaws or contractual prohibitions on such investments in the first place. Someone with the authority to write multimillion dollar checks using taxpayer money isn't vetting their investments for these kinds of issues, and that is a significant problem.

antidaily• 12 years ago

A problem, but not the problem. This seems criminal.

drpgq• 12 years ago

I think one issue is that cities and regions all over the world are desperate to create a startup scene. They'll pony up some money and there will always be some insiders and grifters around to tell them how to spend it.

bitsweet• 12 years ago

The quality of these two startups that received funding is what makes this story suspicious:

http://www.flikdate.com/ http://www.ozolio.com/about.html

shuzchen3• 12 years ago

Yeah, both companies have been around for a while and don't look to be winning it big any time soon. Also, flikdate recently had a merger with CrossBox (http://www.sec.gov/Archives/edgar/data/1493563/0001575872140...) that previously (under the name gogreendirectories) was a "Web portal for environmentally friendly green products and services"? I fail to see the synergy there.

jrushin2• 12 years ago

CrossBox is also somehow related to First Rate Boxing, which sells speedbags, so the synergy is obvious: dating + green products + boxing = environmentally friendly speedbags for first date boxing matches?

chillingeffect• 12 years ago

flikdate.com is down for me as of right now.

I signed up for a free trial on Ozolio and they emailed me asking to call for a demo and included nine links to customer pages that included live webcam footage. Seems legit, although not necessary a smokin' hot game changer.

jrushin2• 12 years ago

Flikdate.com has been unavailable since at least Friday, but it's back up today... but the headline says, "coming very very soon"

crazy1van• 12 years ago

To me there is a lot of irony in investing public money into startups when most citizens cannot easily invest in startups themselves given the accredited investor capital requirements.

Here's how I see the irony unfolding in broad strokes:

1) Average middle class person wants to invest some extra money in a startup, but cannot easily do it because he does not meet the SEC requirements to be an accredited investor (http://www.sec.gov/answers/accred.htm)

2) The State of Hawaii invests public money in startups (in this case based on cronyism -- even worse)

3) Where did that money come from? Tax revenue. Who contributes to tax revenue? The average middle class person from #1.

So basically the person is investing in startups in a roundabout fashion. He just can't choose which ones he invests in and he misses out on the major upside of successful startups. Of course, if the startups fail and the state loses its money, the state will go right back to the average person for more tax revenue.

TTPrograms• 12 years ago

Isn't that generally the idea, though? You give your money to an entity that is presumed to be better at investing it than you ie bank, portfolio manager, mutual fund etc. etc.

The roundaboutness doesn't seem odd to me - the issue in my mind is if this is a sound investment decision for Hawaii. I'm not sure. The answer may be different after this sketchiness, as it could have been legitimately expected that it would help their tech sector in some way. That may still be the case. It really depends on the risk profile Hawaii is going for and the financial status of the state.

jhonovich• 12 years ago

Hawaii has a long sad history in mis-funding tech startups.

Recall ACT 221, which provide 100% state tax credits for investors, resulting in massive wastes and various floundering startups.

In Hawaii, many of the 'leaders' in the tech sector believe that they are just as talented and smart as Silicon Valley, that all they need is the money to prove it. And then, over and over again, the State hands over money, just to end in more embarrassing results.

uurayan• 12 years ago

Such a true statement. The sad part about this john is that many people leading the charge have no recollection of ACT 221 and they write off the people like us that do as haters or non-believers.

bostonvaulter2• 12 years ago

For anyone that is interested in the history of ACT 221 I would highly recommend this writeup (PDF)

http://www.uhero.hawaii.edu/assets/UHERO_WP2009-03.pdf

Mbloom’s first investment is in themselves?

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