World of #DCTech Update
Hi, #DCTech Mr. Sunshine here with a World of #DCTech Update. If you’ve been reading DCInno then you probably have no idea what’s happening in the startup community in this town so it’s time for a #DCTech update on what’s really happening.
- Social Tables – The big news is a sweet exit for Social Tables. Congratulations Dan Berger on an exceptional job. The deal should certainly be labeled a win returning 7X to most investors. This investor is very happy. I’m sure the VCs are pleased and yet not ecstatic because the deal falls short of the 10X plus target of most investors. Yet as a #DCTech Update, this is a big win and a cash deal at that! This is a glass fully full as far as I’m concerned.
- Trackmaven – The Trackmaven “merger” on the other hand… not so much. Reports are that this deal was an exchange in stock at .5X return. Trackmaven is an example of a company taking too much money too fast and not able to grow to justify the valuation. Word is the company needed more money and the investors were tired leading the investors to agree to a “distressed sales.” According to Crunchbase, the acquirer, I mean merger partner Skyword has raised $60 million including $30 million this past January while Trakmaven raised a total of $22 million the last round taking place the end of 2014. That kind of tells the story.
- Mr. Cranky Stabs People In The Front – The Trackmaven story reminds me of something that happened a couple of years ago. Alan Gannet, a smart guy who I admire, and the founder of Trackmaven, called me to do coffee. No explanation… let’s get together. I’ve had coffee with Alan prior and was looking forward to it. During java Alan asked a question that was personally insulting… he asked if I was talking behind his back about the company. At the time, I knew of Trackmaven. Yet I had no idea how things were going good or bad. But “talking behind backs?” That’s an insult. I don’t backslap, grin f#^k, or backstab. I come at people right out there in the open, in the public square of the internet. Alan being nervous about me talking behind his back tipped me off that things were not going so well at Trackmaven… actually that and the fact that a founding CEO was on a road trip pushing a book and his personal brand when his company needed his attention. Alan’s still a smart guy, he’s founded 3 companies, all good, valiant efforts. I still admire him. He just hurt my feelings when he accused me of being a rat.
- Union and Evan Burfield – Speaking of founders who flounder… Old Evan Burfield is doing a world tour of his book, building his personal brand while his “company,” Union is tanking. While Union is getting little to no revenue traction Evan is out telling people how to hack government, because it’s worked so well in his multiple failures. Catch this October 24, 3018 Wired article, REGULATORY HACKERS AREN’T FIXING SOCIETY. THEY’RE GETTING RICH, by the perceptive and astute, Susan Crawford (@scrawford). The article references this New York Times review of the book, “chock-full of checklists, matrices, diagrams, and jargon all of uneven usefulness.” That sounds like a review of Evan Burfield the man as much as his book. It appears that Ms. Crawford, a Harvard Law Professor, thought Burfield was as deep as a puddle in the middle of the Sahara.
- Lifefuels – Big product news coming out of Jonathon Perrelli’s startup! After 4 1/2 years and $5 Million, this gang that can’t shoot straight is finally…. wait for it! Are you ready? I hope you weren’t thinking I was going to say they are shipping product… because unless their product is bullshit, LifeFuels is a company with the best office in town and the least amount of anything that they can sell… they have no product! This isn’t rocket science… it’s a water bottle. Or it would be a water bottle if they had a product.
- Trustify – I just received this email: “Tue, Oct 30, 201,8 at 10:31 AM InsideWoman wrote: You might want to dig into Trustify further. They are laying off employees and cannot make payroll. Owners siphoned hundreds of thousands of dollars from the business.” Sounds like more layoffs and additional payroll misses. The team page was removed this week from the website. Danny Boice and Jen Mellon’s days are numbered at Trustify.
- Dany Boice’s Child Custody Case – For those of you who supported Joanne Boice’s GoFundMe account, thanks. The fund was created to defend Joanne against Danny’s lawsuit to take full custody of their two children. Danny has dropped the lawsuit prior to having to deliver discovery documents that included the companies accounting books that would have revealed that Danny and Jen are fraudulently raising cash from “investors” and embezzling that money from the company. Unfortunately for Danny, Joanne had filed a countersuit for full custody and she wasn’t willing to drop her case. A few weeks ago, Danny’s lawyer resigned from the case and the court ordered that Danny comply with the discovery documents by the 18th. He didn’t. So on this coming Friday, November 2, Danny will be in court facing a contempt of court charge. I wonder why he’s willing to face jail time and fines instead of producing his taxes and his companies accounting records?
- Fortify Angst – Lot’s of Fortify investors are pissed at Perrelli. First, he told investors that his Social Tables return for the fund was $3.3 million but he was only going to pay back investors in the fund $1.9 million and to add injury to insult, this fund that supplied the required K1’s but never a full accounting in how much money they raised, how much money they invested in which companies, how much stock they owned in each company and what is the current value of the portfolio was going to take his 20% carry as if he was a real VC in a real going concern. JPs justification for the difference in the $3.4 million and the $1.9 was a sidecar investment in the later rounds when Fortify was fully invested, had no cash to invest so he took money from somewhere else and exercised Fortify’s non-dilutionary rights. Therefore that money doesn’t go to the Fortify investors. By the way after all the bragging by JP that Fortify raised, depending on the day between $5 and $10 million, the payout from Social Tables indicates the Fortify Fund, raised approximately $2 million. I expect JP to pivot from failing LifeFuels CEO back to “successful” pretend VC. I predict he’ll try to find another group of suckers who are willing to take 10 times the risk to underperform the market. My bet is he’ll try to raise Fortify II, which will be nicknamed, the even a blind squirrel can find an acorn fund. Kudo’s to JP though because the investors received their Social Tables distribution on 10/30/2018… that’s a quick turn-around. Most investors think any return from this fund they had written-off is better than a sharp stick in the eye. None will ever give JP another dime.
- Fortify Returns – I remember having a conversation with a friend when he was going to invest in Fortify. I said to him, why would you pay a management fee and carry to some idiot who is making stupid investment decisions when you could make your own direct stupid investment decisions for free? The friend wrote a check to Perrelli. I decided to make my own stupid decisions and thanks to Veenome and Social Tables, my investments are up 49 percent so far. After paying carry and management fees, Fortify is up 28 percent. Had Fortify LPs and I invested in an S&P 500 fund over the same period, we would be up 126 percent. Shit… I was just about to do a happy dance until I realized I took 10 times the risk to get 1/3 the return.
- Giddy DCInno – DCInno is all giddy about DC being ranked #3 for tech workers in the US (by the way, DC is ranked #2 in the US behind Las Vegas, for Legal Sex workers. Thanks to all the prostitutes in Congress). See that! We are as good as Silicon Valley! Except in Silicon Valley, 95% of the tech workers are focused on commercial startup tech. In DC, 5% are focused on commercial startup tech and the others work for Lockheed, Boeing, IBM Federal, Raytheon, CSC, SAIC, CACI, CIA, NSA, NASA, DOD, Deloitte, PWC, IBM Federal, Google Federal, Amazon Federal… you get the difference?
- Unhealthy Chalant – Chalant Health’s website is no more. A month ago, founder, Matthew Pugsley appeared in court facing a possible jail term for non-payment of child support. Apparently, the court thought Matt would have a better chance of paying child support if he was employed in some other industry than License Plate manufacturing. The rumor is that Matt interviewed to sell home improvement product manufacturer Anderson Windows and then wound up as a Knife Salesman. Good luck Matt!
- Jan Ridgely, United Charitable – Jan a Chalant Health Board Member, Pugsley’s paramour, and the founder and CEO of a questionable charity has gone silent. Stopped harrasing me. Is she sticking by her man? Has she bought knives from him? Why has she gone quiet? Did she not enjoy having her past exposed? By the way Janet… what do you think of this comment left on this blog post about you? “Well, the amount of information & research you’ve done solidifies it. And I can attest that THAT place was not an environment anyone wants to work at. It is hostile and there is always a negative vibe in the office. Finance Director is crazy herself. I think what’s taunting the most is the effort to hide ALL the fraud and then continue to do so in a different business name. I am waiting for American Greed to air a show about this. I’ll get my soda pop with popcorn ready.”
- Old Speek News – Buried in a little lawsuit by Speek acquirer Jive against Andy Powers, because Powers was holding the Speek URL hostage, it was revealed that the cash payout for the acquisition of Speek went to the employees. The proceeds? Investors put $8 million into the company founded by Danny Boice and John Bracken. Jive paid $150,000 and that money went to the employees. The investors got diddly. Not a penny. It’s not clear if Danny received a dime because he had already been fired from the company for embezzling $40,000 he spent on the company credit card in Las Vegas. Investor and Board Member Powers didn’t get anything either so he tried to hold the URL hostage. The lesson here, anyone who references Speek as an exit is embellishing the story. It wasn’t an exit… it was a fire escape. This thing ended so badly, at the end the board couldn’t meet in the same room. Nobody would talk to each other.
So there you go! That’s the World of #DCTech Update. That’s the #DCTech update on what’s really happening in this town.
You’re welcome and love!
Disclaimer: I volunteer my time and am an independent contractor for many organizations. The Views on my blog post are my own and do not represent the views of any of the organizations with whom I dedicate my time. That includes my clients in my coaching practice, the members of my Driven Forward ThinkTank, the University of Maryland. Mach37, The Founders Institute. These views also do not reflect the opinions for any organization that I was formerly associated with including, James Monroe Elementary School, where I graduated with distinction from 6th grade, Lexitron which I left in 1982, Montgomery Youth Hockey or Vistage an organization was grateful to be a part of and of which I happily parted ways in 2014.