4 ms·

Sure, if they falsified their books, that's absolutely illegal. But "they told me their business model was sustainable, and I believed them and gave them my mon

by kosei 8y ago

Sure, if they falsified their books, that's absolutely illegal. But "they told me their business model was sustainable, and I believed them and gave them my money" doesn't seem like a reasonable argument either. If that's how those investors fund their companies, I've got this nifty bag of magic beans they might be interested in... For $1M, they'll grow $2M in beans, I promise!

smnrchrds 8y ago
> For $1M, they'll grow $2M in beans, I promise! You are reinforcing my point. If you do that, it would be fraud, plain and simple. You would have to pay the investors back and you will spend a couple of years in prison. You can't show up to the court and say, but your honour, they should have known better. Well, you can, but it would not change the court's decision in your favour. Communications with the investors is not a place to play loose. If you say we are profitable and you are not, or we are sustainable and you are not, or we have a buyer lined up and you do not, you would find yourself in a world of trouble.
- hn_throwaway_99 8y ago
  The argument we are making is that MoviePass's business model WAS sustainable, it's just that the model was predicated on the very risky proposition that they'd be able to get sweet deals with movie theaters, which didn't happen. Tons of people felt that their model was extremely unlikely to come to fruition, so they didn't invest. We don't know the full story of what was said, and it is possible the defendants lied about factual content, but right now it just sounds like sour grapes.
- ryanwaggoner 8y ago
  One of those things isn’t like the others. Profitable and having a buyer are factual. Sustainable is a forecast, and you can definitely be wrong about forecasts with investors. That’s kind of the standard outcome.
talltimtom 8y ago
Why not? The alternative would be that any company could outright lie to investors and the go to court with a defense of “well you honor, they believed our lies and gave us money, so really, they are to blame!” That’s just wrong.

by kosei 8y ago

smnrchrds 8y ago

> For $1M, they'll grow $2M in beans, I promise! You are reinforcing my point. If you do that, it would be fraud, plain and simple. You would have to pay the investors back and you will spend a couple of years in prison. You can't show up to the court and say, but your honour, they should have known better. Well, you can, but it would not change the court's decision in your favour. Communications with the investors is not a place to play loose. If you say we are profitable and you are not, or we are sustainable and you are not, or we have a buyer lined up and you do not, you would find yourself in a world of trouble.

hn_throwaway_99 8y ago
The argument we are making is that MoviePass's business model WAS sustainable, it's just that the model was predicated on the very risky proposition that they'd be able to get sweet deals with movie theaters, which didn't happen. Tons of people felt that their model was extremely unlikely to come to fruition, so they didn't invest. We don't know the full story of what was said, and it is possible the defendants lied about factual content, but right now it just sounds like sour grapes.
ryanwaggoner 8y ago
One of those things isn’t like the others. Profitable and having a buyer are factual. Sustainable is a forecast, and you can definitely be wrong about forecasts with investors. That’s kind of the standard outcome.

talltimtom 8y ago

Why not? The alternative would be that any company could outright lie to investors and the go to court with a defense of “well you honor, they believed our lies and gave us money, so really, they are to blame!” That’s just wrong.