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I didn't see the OP saying you should lie, only that the system relies on self-reporting. If anything, I'd guess they agree that the system is open to abuse, bu
by blowski 5y ago
I didn't see the OP saying you should lie, only that the system relies on self-reporting. If anything, I'd guess they agree that the system is open to abuse, but they're not saying people should therefore abuse it.
- djbusby 5y agoPerhaps I'm just bitter I've been part of a non-zero amount of deals where there was one, or more, parties who've made that false claim. In an open group I participate in there are some early Angels and want-to-be investors. I've observed folks attempting this shortcut. And every time it's fucked over multiple people. So, yea, it's trust based - and truth will out.
- cure 5y agoSorry to hear that, that sucks!
- Drdrdrq 5y agoFor the uninitiated, what happens in this scenario? Does the deal fall through, do the other investors need to cover for the missing party,...?
- djbusby 5y agoMostly the deal falls apart, the company seeking investment can't get it (timely) - and may have to start all over (6mo process). Another outcome was that the folk buying in had to buy out the non-RegD parties - and crushed them on the price so those investors got a better price, the fraudulent actors didn't see the gains they thought, the company now has more % owned by new investor group than originally thought (which changes the control balance) and the founders are grumpy and distracted and mad at folk they thought were cool (and all that has a down-pressure on productivity while everyone involved gossips for a few weeks) Edit: of you're getting your FFF round, it's all private, that group can be unqualified and you mark the deal as a Loan, so when you raise your Angel round you'll pay them back, or start the payback - and let the Angels know that's happening. Part of the investment to service debt.