7 ms·

Sorry Purism, I’m not investing. It’s (possibly) not even legal

104 points by gjsman-1000 4y ago

zkirill 4y ago
I am curious if there is a market for a "get things done" phone that runs a RTOS like the old BlackBerries and prioritizes LTS and operational efficiency above all else. Given startup cost I assume it would be in the US$3,000+ range which is not crazy for an "essential to business" device with guaranteed 10 year support and would still be far cheaper than something like Vertu.
- maven29 4y ago
  Nokia sells 4g feature phones in both mediatek RTOS and KaiOS (firefox OS derivative) variants. The latter can run whatsapp, although feature support is a bit behind. Unfortunately, QWERTY versions would not enjoy the same scale of economy, mostly due to dexterity requirements that would alienate the usual target audience.
OrvalWintermute 4y ago
> a 21-year-old software developer In the past I have seen self-certification for Accredited Investor status, as well as out-sourced services that verify some data for a determination. I think response around what is legal or not is best left to those with a background and education in the legal profession.
- gjsman-1000 4y ago
  Original writer here. I wrote it initially because it would certainly not be legal for me to invest being not an Accredited Investor, and also because the "Accredited Investor" gibberish reeks of similar disclaimers used with ICOs (aka shitcoins). However, I agree that I cannot determine and have amended the title to include "(possibly)" as I do my best to argue; and I believe that Purism may well be violating the plain language of the relevant SEC sections that got certain shitcoins (and more legitimate ones like Ripple) into hot water. At a minimum though, I think we can agree that it is questionable conduct.
  - dwallin 4y ago
    If you think something fishy is going on I recommend reporting them to the SEC and possible qualify for a nice reward if they actually are violating the law: https://www.sec.gov/whistleblower https://www.sec.gov/whistleblower
- jmillikin 4y ago
  There's nothing wrong with someone pointing out that something is illegal, for example I don't have to be a lawyer to note that stealing a car would violate criminal law. It's reasonable for the OP to note that if they were to invest in that deal, then someone must be breaking the law. Note also that what you call "self-certification" is just ... it's how things are for everyone? It's not like you can ask the SEC for a piece of paper documenting that you qualify. There are some professional licenses that automatically count, but if you made $210,000 in W-2 income last year there's no report submitted to a central registry of People Allowed To Make Risky Investments.
  - gjsman-1000 4y ago
    Right. I am not a lawyer (writer here), but read this page (as called out in the article) about Rule 506(c). https://www.sec.gov/education/smallbusiness/exemptofferings/rule506c https://www.sec.gov/education/smallbusiness/exemptofferings/... The requirement they seem to follow is: "all purchasers in the offering are accredited investors and the issuer takes reasonable steps to verify purchasers’ accredited investor status" Purism argues that everyone must be an accredited investor; but they state they take no steps to verify anyone. They even say that it is impossible to comply with the law ("since there is no way for Purism to validate your accredited investor status"). Well, what is it then? Are they securities or not? If they aren't securities, why the accredited investor requirement? Are you instead going under Rule 504, which seems to prohibit anything publicly offered? If 504 doesn't work and you are ignoring a requirement for 506, is there some other section, or is it just (arguably) flat-out illegal? It doesn't take a lawyer to say that something's fishy. While the law is probably fuzzy on what that verification requires, Purism could at least just call people on the phone, and say, "hey, we need accredited investors, are you one? Do you fully understand what this means and what your obligations are?" And record the response for legal purposes.
    - quesera 4y ago
      I've seen these "reasonable steps" devolve to requiring the purchaser to explicitly state that they qualify in a legal document (contract).
    - 4y ago
- andrewflnr 4y ago
  > what is legal or not is best left to those with a background and education in the legal profession Tangent, but I just want everyone to recognize how obscenely absurd this (largely true) sentence is. How are we, the vast bulk of non-law-school-graduates, supposed to follow the law in our day to day lives if just figuring out what's legal literally requires multiple college degrees?
  - jmillikin 4y ago
    Many people posting on the internet have this strange idea that American law is opaque and difficult to understand, but in general it's actually pretty accessible. If you can read software, you can read American legal documents. The reason lawyers get paid so much is that if you're doing something that is right on the boundary[0] then the difference between legal and illegal might be extremely fuzzy, and also worth a lot of money, so it's worth paying someone $1000 an hour to write a long brief in your local judge's preferred WordPerfect template about why what you're doing is OK. On the other hand, the SEC website linked by OP just has a checklist of Accredited Investor qualifications, and it's possible to read them. Do you have a salary of $300,000? You qualify. Did you make $195,000? Well, that's less than $200,000 so unless one of the other checkboxes matches, you're out of luck[1]. [0] Maybe it's illegal by the letter of the law but you think it shouldn't be, like ride-sharing in locations with taxi regulations. Or maybe it's not illegal but might be viewed with extreme skepticism by regulators, like offering a non-fraudy Bitcoin exchange. In both of those cases, there's an easy solution (just don't do the maybe-illegal thing) that is accessible to the layman. [1] Maybe you can hire a lawyer and/or CPA to get your $6000 of undeclared dog-walking income counted for the purposes of Accredited Investor qualification, but is it really worth the hassle?
    - digi59404 4y ago
      This isn’t really true. The law as written might be easily understood by reading it. But that is not the entire story. The US has multiple forms of law, Legislative Law, as ratified by the Legislative Body. Then Case Law which is law introduced by Judicial courts which may or may not invalidate, expand, or change the legislative law. The US also has courts under specific bodies such as the EPA. Lawyers exist to be able to tell you “the law says x, however the most common case law actually says Y.” In terms of investor, patent, and IP law this is SIGNIFICANT. You could be violating the investment laws enacted by the legislature; but it could be entirely legal because a court in your district invalidated that law. However, you fly to New York, a different district, and it’s illegal again. Determining what is legal and what is illegal can be exceptionally difficult. Because the layman doesn’t have access to the thousand dollar monthly subscription of LexusNexus to do case law searches. They probably don’t even know that this exists. Another example - California has a law on the books that states that you’re not allowed to own batons and nunchucks….. Except in Yuba County, where a Judge has thrown out the law via a court case, and the DA never appealed the ruling. But if you’re arrested by the CHP, instead of the Sheriff they can try you in State Court, and it applies again.
thombles 4y ago
These emails have been bizarre. Seemingly because I once crowdfunded the librem 5 my email address ended up on an "investor-relations" mailing list which periodically solicited, well, investments. Bonus points to the enlightened soul who realised that reply-all was open and described it as a Ponzi scheme, and to Purism themselves for having a non-functional unsubscribe page for the list. (They did remove me when I asked last September.)
- gjsman-1000 4y ago
  I didn't mention it in the article, but since when does any legitimate organization advertise that you will receive a "5% bonus on your investment value!" if you send cash now? Maybe I've missed some but just that wording...
  - fsckboy 4y ago
    [flagged]
    - gjsman-1000 4y ago
      You are allowed to give perks to shareholders. That can be normal. What is not normal is two conditions: A. Advertising a perk as a reason to invest initially. Nobody normally buys stock because of a free gift box or a discounted vacation. It's a perk, but it's not something that is marketed as being a reason to buy stock. Also... B. The perks are never direct financial benefits. They are always discounts, or little treats. Advertising that your investment will be increased by 5% to result in a greater investment is a direct, financial incentive for an initial investment as though investments are sales at a big-box store.
    - justinclift 4y ago
      > I'm not an investor or customer So, you're an employee or ex-employee then?
  - JumpCrisscross 4y ago
    > since when does any legitimate organization advertise that you will receive a "5% bonus on your investment value!" if you send cash now It’s not uncommon to give first-close investors a perk for committing early. That said, it invites scrutiny when targeted at retail investors. (In a vacuum of diligence no less.)
zoklet-enjoyer 4y ago
The whole accredited investor thing is bullshit
- NotYourLawyer 4y ago
  Lots of laws are bullshit. They still send you to prison for breaking them though.
- matrix_overload 4y ago
  It's not. It serves as a counterbalance to much lighter reporting/auditing requirements for private vs. public companies. It's way easier for a private company to do some creative accounting and do away with your money without committing a criminally punishable offence. The idea is that if you have $1M in assets, you can tolerate that risk (or do your own due diligence), but if your entire life savings is something like $50K, don't give them to that sleazy guy on the phone that isn't independently audited or banned from pump-and-dumping his own stock.
  - tastyfreeze 4y ago
    It isn't the government's responsibility to protect people from their own mistakes. Accredited investor laws only serve as a gate keeping mechanism.
    - yathaid 4y ago
      That's like ... your opinion. It isn't the government's responsibility to make sure there isn't lead in the food you eat, but we have the FDA. Ditto usury laws, medicine laws etc.
      - tastyfreeze 4y ago
        Yup. The government does a lot more than it was set up to do.
    - greyface- 4y ago
matrix_overload 4y ago
Oh, shit. This sounds like a non-financial person (an engineer?) acting out of desperation, trying to plug a financial hole. Without realizing that they are breaking very serious securities rules, and SEC will be in their full right to shut the entire business down. I wish they would talk to a good accountant first. I believe they have good intentions, but this could cost them more than they think.
- fsckboy 4y ago
  >I wish they would talk to a good accountant first. I believe they have good intentions, but this could cost them more than they think. why do you assume they haven't spoken to an attorney? what is your expertise in this area? serious question.
  - JumpCrisscross 4y ago
    > why do you assume they haven't spoken to an attorney? Accredited investor requirements are NOT “a good faith requirement,” and there absolutely are ways “for Purism to validate your accredited investor status.” This statement, in a general solicitation e-mail no less, would not get sign off from any competent securities counsel. Their fundraising site is tighter but still leaky. The notes are governed by Washington law [1], for example, which means e.g. they can’t ignore investor protections for non-Americans (as they claim). Also, other jurisdictions have securities laws—it is incorrect to claim if “not a United States citizen there is no restriction to invest” [2]. Finally, they are selling these notes through their store, which offers check out with Stripe. I was able to get to a credit-card checkout page. That’s a no-no on multiple levels. (If you want to do something like this properly, look into Tier 1 Reg A+ offerings [3]. There are turnkey providers, e.g. StartEngine [4], though I'm skeptical of anyone requiring large up-front payments.) [1] https://puri.sm/wp-content/uploads/2021/07/purism-convertible-promissory-note-2021-series.pdf https://puri.sm/wp-content/uploads/2021/07/purism-convertibl... [2] https://puri.sm/ir/convertible-note/ https://puri.sm/ir/convertible-note/ [3] https://www.bartonesq.com/news-article/reg-a-offerings-faqs/ https://www.bartonesq.com/news-article/reg-a-offerings-faqs/ [4] https://www.startengine.com/blog/regulation-a-what-entrepreneurs-need-to-know/ https://www.startengine.com/blog/regulation-a-what-entrepren...
im3w1l 4y ago
I've been considering getting a Librem 5 but I'm just not comfortable with a huge lead time. Ironically if I would have ordered one when I first considered it I would probably have had it a long time ago. I'm not good at planning... If they are indeed panicing, I'm surprised they managed to end up in that state even as they are unable to keep up with demand. Unless this whole thing with being out of stock permanently is an intentional strategy to reduce risk of unsold inventory?
clnq 4y ago
Several articles on the blog — https://news.ycombinator.com/from?site=gabrielsieben.tech https://news.ycombinator.com/from?site=gabrielsieben.tech — have been criticized for their quality. I must express my skepticism about this one as well. The article appears sensationalist, with numerous strong statements accompanied by qualifiers, such as "potentially illegally misleading" and "Ponzi scheme if the anecdotes are true." These claims, which rely heavily on anecdotes and hunches, lack factual substance. Some just seem wrong. For instance, the author incorrectly associates low liquidity of notes with fraud, when some financial instruments are simply less liquid. Furthermore, there seems to be a personal bias against Purism, as the investment returns are criticized, even though they are unrelated to the primary topic of questionable legality. The use of emotional language, such as "shady," "sketchy," and "icky," adds no factual value. Considering the blog's history on HN, my skepticism is heightened. While I'm open to the possibility of Purism's investment solicitation being suspicious — perhaps such a case can be made, I expect an investigative piece to provide more facts and less speculation. It would have been appreciated in this case.
- gjsman-1000 4y ago
  Hello, author here. I accept that, and will try to write better in the future. However, I also subscribe to the philosophy that if nobody talks, who will? And so if I have questions, I would rather raise them and be 25% wrong, than leave them undiscussed until they potentially hurt someone. At a minimum, everything gets clarified, I might look like an idiot, but there's still a clarity there that there wasn't previously. Though, as I will admit, my verbiage could be improved and I haven't resorted to having ChatGPT clean up my articles for me yet. > I expect an investigative piece to provide more facts and less speculation I can only speculate in the hopes that maybe someone, somewhere, will do a serious investigation. If you can, please do. Everything has to start somewhere though and it hurts to be first.
  - newaccount74 4y ago
    I think your writing style is totally fine. If something feels icky and sounds like a fraud, it's fine to call it out, and use whatever words you want to do so.
schnorrkel5519 4y ago
This doesn't seem to be going well: Nov 2022: 2,664,000 / $3,500,000 Dec 2022: 2,664,000 / $3,500,000 Today: 2,725,750 / $3,500,000 +$61k in 6 months it not enough to run a hardware company or justify such an odd / risky campaign. I'm also doubtful the $2.6m is real. They've made a wonderful product with an admirable approach, but something feels wrong here. [0] https://web.archive.org/web/20221128104123/https://puri.sm/ir/convertible-note/ https://web.archive.org/web/20221128104123/https://puri.sm/i... [1] https://web.archive.org/web/20221207172005/https://puri.sm/ir/convertible-note/ https://web.archive.org/web/20221207172005/https://puri.sm/i... [2] https://puri.sm/ir/convertible-note/ https://puri.sm/ir/convertible-note/
- gjsman-1000 4y ago
  > I'm also doubtful the $2.6m is real. Is there any chance the $2.1 million they raised back all the way back in 2017 is being factored into the number to make it look better? (I literally have nothing to back this theory, I'm just asking.)
marcus_holmes 4y ago
I love Purism. I'm writing this on one of their laptops, which is beautiful and by far my favourite laptop (and I had one of the good MacBooks!). But watching them destroy themselves isn't fun. I've recommended Purism laptops to multiple people, only to have Purism ship them faulty machines (twice now, and my laptop shipped with a defective screen). I've watched the phone development with interest, but never got to the point where I felt comfortable actually ordering one. It feels like they're trying too many things at once instead of doubling down on making the world's best Linux laptop. I receive their investment emails but I don't invest. I'm a customer in this relationship, not a shareholder. If they really want their customers as their shareholders then they should consider switching to being a co-operative.
- fsckboy 4y ago
  [flagged]
  - marcus_holmes 4y ago
    > they're not trying to destroy themselves, they're trying to save themselves. You're kicking a friend when he's down. I didn't mean about the investment. I meant the continued problems and lack of focus. I know they're trying to save the company, but the problems they face were of their own making. It's painful watching them do this. > Why you gotta be salty about it? I didn't mean it to come across as salty. It's just weird them asking their customers to be investors. Most businesses don't need to do this, and there are specific business structures available for those that do. Again, it's creating problems they don't need to create and it's painful watching them do this.
    - mnky9800n 4y ago
      Hi, you bought ice cream from my truck for 10$, would you also like to give me 5$? I'll give you some of it back if we make a profit one day. Oh, and I realize it took me a week to deliver the ice cream and it was melted by that point, but it would be nice if you could invest in our company. We are innovating in the ice cream space and innovation cannot have a price.
wander_homer 4y ago
The company seems to be in deep financial troubles. They've also been violating their refund policy and FTC rules as there are dozens of reports of customers who cancelled their orders months or years ago due to those absurd and frequent delays and they still don't have their money back.
- fsckboy 4y ago
  companies can't refund money they don't have; people who are owed money become creditors in bankruptcy. The company can, however, attempt to stay afloat and prosper enough to make creditors whole.
  - deleted 4y ago
    [deleted]
  - donavanm 4y ago
    Im not in the US, but here in Australia this would smell of “trading insolvent” and is a short path to piercing the veil/personal liability, fines, and prohibitions against serving as directors or officers for everyone involved.
    - MichaelZuo 4y ago
      It's a much higher bar in the U.S. to do so. Which is part of the reason why startups love moving from Australia to the U.S. but not the other way around.
deleted 4y ago
[deleted]
goldforever 4y ago
[dead]
medellin 4y ago
Really wanted to support the phone development but im very glad i pulled out after it took over 6 months and they just kept pushing it out past the original timeline and then adding different versions that they would ship at different times.
pengaru 4y ago
This company is doomed. https://www.phoronix.com/news/Zlatan-Todoric-Interview https://www.phoronix.com/news/Zlatan-Todoric-Interview
flipperhero 4y ago
Purism are leading the Linux Mobile movement, with their investments in Phosh, GNOME, PureOS, and upstream development for the Librem 5. The Librem 5 remains the flagship device, in terms of performance, support and mainline support, though at a high price and lead time. Sparking and sustaining a field is tough, and it's clear Purism has had difficulties. I hope they get through these. I believe the movement relies on their existence and continued development.
- deleted 4y ago
  [deleted]
seba_dos1 4y ago
> So why does the email to their investors say it will be in stock in just 8 weeks, whereas their website says 52 weeks? That's simple - because the production batch that covers all the remaining backorders is already on its way: https://puri.sm/posts/where-is-my-librem-5-part-3/ https://puri.sm/posts/where-is-my-librem-5-part-3/
- gjsman-1000 4y ago
  Good enough that I just updated the article to mention it. However, the email sent to prospective investors specifically says In stock by July which is still questionable. Either that's wrong, or the claim of a 52-week lead time is wrong, or a 52-week lead time qualifies as "In Stock." Even if that is addressed in that blog post.
  - seba_dos1 4y ago
    > the claim of a 52-week lead time is wrong It simply hasn't been updated and at this point likely won't be until it shows "in stock" instead.
    - gjsman-1000 4y ago
      They say in their blog post: > I’m starting to see the light at the end of the tunnel, but hitting shipping parity will depend on the E5 production run going according to plan, and our not hitting any more supply chain snags along the way. Because of this uncertainty, I have not yet updated our 52-week lead time on new Librem 5 orders, and will likely not update it until the E5 production run is complete and waiting for its turn to ship to customers. [...] So, they are keeping the 52-week out of "uncertainty". Which is fine, by all means. However, they are quoting 8 weeks to investors without mentioning the uncertainty. Which is legally worse? Misleading customers, or misleading investors, if that uncertainty materializes? Especially on a sale that does not appear to meet other legal checkboxes like investor status verification?
      - seba_dos1 4y ago

104 points by gjsman-1000 4y ago

I am curious if there is a market for a "get things done" phone that runs a RTOS like the old BlackBerries and prioritizes LTS and operational efficiency above all else. Given startup cost I assume it would be in the US$3,000+ range which is not crazy for an "essential to business" device with guaranteed 10 year support and would still be far cheaper than something like Vertu.

maven29 4y ago
Nokia sells 4g feature phones in both mediatek RTOS and KaiOS (firefox OS derivative) variants. The latter can run whatsapp, although feature support is a bit behind. Unfortunately, QWERTY versions would not enjoy the same scale of economy, mostly due to dexterity requirements that would alienate the usual target audience.

OrvalWintermute 4y ago

> a 21-year-old software developer In the past I have seen self-certification for Accredited Investor status, as well as out-sourced services that verify some data for a determination. I think response around what is legal or not is best left to those with a background and education in the legal profession.

gjsman-1000 4y ago
Original writer here. I wrote it initially because it would certainly not be legal for me to invest being not an Accredited Investor, and also because the "Accredited Investor" gibberish reeks of similar disclaimers used with ICOs (aka shitcoins). However, I agree that I cannot determine and have amended the title to include "(possibly)" as I do my best to argue; and I believe that Purism may well be violating the plain language of the relevant SEC sections that got certain shitcoins (and more legitimate ones like Ripple) into hot water. At a minimum though, I think we can agree that it is questionable conduct.
- dwallin 4y ago
  If you think something fishy is going on I recommend reporting them to the SEC and possible qualify for a nice reward if they actually are violating the law: https://www.sec.gov/whistleblower https://www.sec.gov/whistleblower
jmillikin 4y ago
There's nothing wrong with someone pointing out that something is illegal, for example I don't have to be a lawyer to note that stealing a car would violate criminal law. It's reasonable for the OP to note that if they were to invest in that deal, then someone must be breaking the law. Note also that what you call "self-certification" is just ... it's how things are for everyone? It's not like you can ask the SEC for a piece of paper documenting that you qualify. There are some professional licenses that automatically count, but if you made $210,000 in W-2 income last year there's no report submitted to a central registry of People Allowed To Make Risky Investments.
- gjsman-1000 4y ago
  Right. I am not a lawyer (writer here), but read this page (as called out in the article) about Rule 506(c). https://www.sec.gov/education/smallbusiness/exemptofferings/rule506c https://www.sec.gov/education/smallbusiness/exemptofferings/... The requirement they seem to follow is: "all purchasers in the offering are accredited investors and the issuer takes reasonable steps to verify purchasers’ accredited investor status" Purism argues that everyone must be an accredited investor; but they state they take no steps to verify anyone. They even say that it is impossible to comply with the law ("since there is no way for Purism to validate your accredited investor status"). Well, what is it then? Are they securities or not? If they aren't securities, why the accredited investor requirement? Are you instead going under Rule 504, which seems to prohibit anything publicly offered? If 504 doesn't work and you are ignoring a requirement for 506, is there some other section, or is it just (arguably) flat-out illegal? It doesn't take a lawyer to say that something's fishy. While the law is probably fuzzy on what that verification requires, Purism could at least just call people on the phone, and say, "hey, we need accredited investors, are you one? Do you fully understand what this means and what your obligations are?" And record the response for legal purposes.
  - quesera 4y ago
    I've seen these "reasonable steps" devolve to requiring the purchaser to explicitly state that they qualify in a legal document (contract).
  - 4y ago
andrewflnr 4y ago
> what is legal or not is best left to those with a background and education in the legal profession Tangent, but I just want everyone to recognize how obscenely absurd this (largely true) sentence is. How are we, the vast bulk of non-law-school-graduates, supposed to follow the law in our day to day lives if just figuring out what's legal literally requires multiple college degrees?
- jmillikin 4y ago
  Many people posting on the internet have this strange idea that American law is opaque and difficult to understand, but in general it's actually pretty accessible. If you can read software, you can read American legal documents. The reason lawyers get paid so much is that if you're doing something that is right on the boundary[0] then the difference between legal and illegal might be extremely fuzzy, and also worth a lot of money, so it's worth paying someone $1000 an hour to write a long brief in your local judge's preferred WordPerfect template about why what you're doing is OK. On the other hand, the SEC website linked by OP just has a checklist of Accredited Investor qualifications, and it's possible to read them. Do you have a salary of $300,000? You qualify. Did you make $195,000? Well, that's less than $200,000 so unless one of the other checkboxes matches, you're out of luck[1]. [0] Maybe it's illegal by the letter of the law but you think it shouldn't be, like ride-sharing in locations with taxi regulations. Or maybe it's not illegal but might be viewed with extreme skepticism by regulators, like offering a non-fraudy Bitcoin exchange. In both of those cases, there's an easy solution (just don't do the maybe-illegal thing) that is accessible to the layman. [1] Maybe you can hire a lawyer and/or CPA to get your $6000 of undeclared dog-walking income counted for the purposes of Accredited Investor qualification, but is it really worth the hassle?
  - digi59404 4y ago
    This isn’t really true. The law as written might be easily understood by reading it. But that is not the entire story. The US has multiple forms of law, Legislative Law, as ratified by the Legislative Body. Then Case Law which is law introduced by Judicial courts which may or may not invalidate, expand, or change the legislative law. The US also has courts under specific bodies such as the EPA. Lawyers exist to be able to tell you “the law says x, however the most common case law actually says Y.” In terms of investor, patent, and IP law this is SIGNIFICANT. You could be violating the investment laws enacted by the legislature; but it could be entirely legal because a court in your district invalidated that law. However, you fly to New York, a different district, and it’s illegal again. Determining what is legal and what is illegal can be exceptionally difficult. Because the layman doesn’t have access to the thousand dollar monthly subscription of LexusNexus to do case law searches. They probably don’t even know that this exists. Another example - California has a law on the books that states that you’re not allowed to own batons and nunchucks….. Except in Yuba County, where a Judge has thrown out the law via a court case, and the DA never appealed the ruling. But if you’re arrested by the CHP, instead of the Sheriff they can try you in State Court, and it applies again.

thombles 4y ago

These emails have been bizarre. Seemingly because I once crowdfunded the librem 5 my email address ended up on an "investor-relations" mailing list which periodically solicited, well, investments. Bonus points to the enlightened soul who realised that reply-all was open and described it as a Ponzi scheme, and to Purism themselves for having a non-functional unsubscribe page for the list. (They did remove me when I asked last September.)

gjsman-1000 4y ago
I didn't mention it in the article, but since when does any legitimate organization advertise that you will receive a "5% bonus on your investment value!" if you send cash now? Maybe I've missed some but just that wording...
- fsckboy 4y ago
  [flagged]
  - gjsman-1000 4y ago
    You are allowed to give perks to shareholders. That can be normal. What is not normal is two conditions: A. Advertising a perk as a reason to invest initially. Nobody normally buys stock because of a free gift box or a discounted vacation. It's a perk, but it's not something that is marketed as being a reason to buy stock. Also... B. The perks are never direct financial benefits. They are always discounts, or little treats. Advertising that your investment will be increased by 5% to result in a greater investment is a direct, financial incentive for an initial investment as though investments are sales at a big-box store.
  - justinclift 4y ago
    > I'm not an investor or customer So, you're an employee or ex-employee then?
- JumpCrisscross 4y ago
  > since when does any legitimate organization advertise that you will receive a "5% bonus on your investment value!" if you send cash now It’s not uncommon to give first-close investors a perk for committing early. That said, it invites scrutiny when targeted at retail investors. (In a vacuum of diligence no less.)

zoklet-enjoyer 4y ago

The whole accredited investor thing is bullshit

NotYourLawyer 4y ago
Lots of laws are bullshit. They still send you to prison for breaking them though.
matrix_overload 4y ago
It's not. It serves as a counterbalance to much lighter reporting/auditing requirements for private vs. public companies. It's way easier for a private company to do some creative accounting and do away with your money without committing a criminally punishable offence. The idea is that if you have $1M in assets, you can tolerate that risk (or do your own due diligence), but if your entire life savings is something like $50K, don't give them to that sleazy guy on the phone that isn't independently audited or banned from pump-and-dumping his own stock.
- tastyfreeze 4y ago
  It isn't the government's responsibility to protect people from their own mistakes. Accredited investor laws only serve as a gate keeping mechanism.
  - yathaid 4y ago
    That's like ... your opinion. It isn't the government's responsibility to make sure there isn't lead in the food you eat, but we have the FDA. Ditto usury laws, medicine laws etc.
    - tastyfreeze 4y ago
      Yup. The government does a lot more than it was set up to do.
  - greyface- 4y ago

matrix_overload 4y ago

Oh, shit. This sounds like a non-financial person (an engineer?) acting out of desperation, trying to plug a financial hole. Without realizing that they are breaking very serious securities rules, and SEC will be in their full right to shut the entire business down. I wish they would talk to a good accountant first. I believe they have good intentions, but this could cost them more than they think.

fsckboy 4y ago
>I wish they would talk to a good accountant first. I believe they have good intentions, but this could cost them more than they think. why do you assume they haven't spoken to an attorney? what is your expertise in this area? serious question.
- JumpCrisscross 4y ago
  > why do you assume they haven't spoken to an attorney? Accredited investor requirements are NOT “a good faith requirement,” and there absolutely are ways “for Purism to validate your accredited investor status.” This statement, in a general solicitation e-mail no less, would not get sign off from any competent securities counsel. Their fundraising site is tighter but still leaky. The notes are governed by Washington law [1], for example, which means e.g. they can’t ignore investor protections for non-Americans (as they claim). Also, other jurisdictions have securities laws—it is incorrect to claim if “not a United States citizen there is no restriction to invest” [2]. Finally, they are selling these notes through their store, which offers check out with Stripe. I was able to get to a credit-card checkout page. That’s a no-no on multiple levels. (If you want to do something like this properly, look into Tier 1 Reg A+ offerings [3]. There are turnkey providers, e.g. StartEngine [4], though I'm skeptical of anyone requiring large up-front payments.) [1] https://puri.sm/wp-content/uploads/2021/07/purism-convertible-promissory-note-2021-series.pdf https://puri.sm/wp-content/uploads/2021/07/purism-convertibl... [2] https://puri.sm/ir/convertible-note/ https://puri.sm/ir/convertible-note/ [3] https://www.bartonesq.com/news-article/reg-a-offerings-faqs/ https://www.bartonesq.com/news-article/reg-a-offerings-faqs/ [4] https://www.startengine.com/blog/regulation-a-what-entrepreneurs-need-to-know/ https://www.startengine.com/blog/regulation-a-what-entrepren...

im3w1l 4y ago

I've been considering getting a Librem 5 but I'm just not comfortable with a huge lead time. Ironically if I would have ordered one when I first considered it I would probably have had it a long time ago. I'm not good at planning... If they are indeed panicing, I'm surprised they managed to end up in that state even as they are unable to keep up with demand. Unless this whole thing with being out of stock permanently is an intentional strategy to reduce risk of unsold inventory?

clnq 4y ago

Several articles on the blog — https://news.ycombinator.com/from?site=gabrielsieben.tech https://news.ycombinator.com/from?site=gabrielsieben.tech — have been criticized for their quality. I must express my skepticism about this one as well. The article appears sensationalist, with numerous strong statements accompanied by qualifiers, such as "potentially illegally misleading" and "Ponzi scheme if the anecdotes are true." These claims, which rely heavily on anecdotes and hunches, lack factual substance. Some just seem wrong. For instance, the author incorrectly associates low liquidity of notes with fraud, when some financial instruments are simply less liquid. Furthermore, there seems to be a personal bias against Purism, as the investment returns are criticized, even though they are unrelated to the primary topic of questionable legality. The use of emotional language, such as "shady," "sketchy," and "icky," adds no factual value. Considering the blog's history on HN, my skepticism is heightened. While I'm open to the possibility of Purism's investment solicitation being suspicious — perhaps such a case can be made, I expect an investigative piece to provide more facts and less speculation. It would have been appreciated in this case.

gjsman-1000 4y ago
Hello, author here. I accept that, and will try to write better in the future. However, I also subscribe to the philosophy that if nobody talks, who will? And so if I have questions, I would rather raise them and be 25% wrong, than leave them undiscussed until they potentially hurt someone. At a minimum, everything gets clarified, I might look like an idiot, but there's still a clarity there that there wasn't previously. Though, as I will admit, my verbiage could be improved and I haven't resorted to having ChatGPT clean up my articles for me yet. > I expect an investigative piece to provide more facts and less speculation I can only speculate in the hopes that maybe someone, somewhere, will do a serious investigation. If you can, please do. Everything has to start somewhere though and it hurts to be first.
- newaccount74 4y ago
  I think your writing style is totally fine. If something feels icky and sounds like a fraud, it's fine to call it out, and use whatever words you want to do so.

schnorrkel5519 4y ago

This doesn't seem to be going well: Nov 2022: 2,664,000 / $3,500,000 Dec 2022: 2,664,000 / $3,500,000 Today: 2,725,750 / $3,500,000 +$61k in 6 months it not enough to run a hardware company or justify such an odd / risky campaign. I'm also doubtful the $2.6m is real. They've made a wonderful product with an admirable approach, but something feels wrong here. [0] https://web.archive.org/web/20221128104123/https://puri.sm/ir/convertible-note/ https://web.archive.org/web/20221128104123/https://puri.sm/i... [1] https://web.archive.org/web/20221207172005/https://puri.sm/ir/convertible-note/ https://web.archive.org/web/20221207172005/https://puri.sm/i... [2] https://puri.sm/ir/convertible-note/ https://puri.sm/ir/convertible-note/

gjsman-1000 4y ago
> I'm also doubtful the $2.6m is real. Is there any chance the $2.1 million they raised back all the way back in 2017 is being factored into the number to make it look better? (I literally have nothing to back this theory, I'm just asking.)

marcus_holmes 4y ago

I love Purism. I'm writing this on one of their laptops, which is beautiful and by far my favourite laptop (and I had one of the good MacBooks!). But watching them destroy themselves isn't fun. I've recommended Purism laptops to multiple people, only to have Purism ship them faulty machines (twice now, and my laptop shipped with a defective screen). I've watched the phone development with interest, but never got to the point where I felt comfortable actually ordering one. It feels like they're trying too many things at once instead of doubling down on making the world's best Linux laptop. I receive their investment emails but I don't invest. I'm a customer in this relationship, not a shareholder. If they really want their customers as their shareholders then they should consider switching to being a co-operative.

fsckboy 4y ago
[flagged]
- marcus_holmes 4y ago
  > they're not trying to destroy themselves, they're trying to save themselves. You're kicking a friend when he's down. I didn't mean about the investment. I meant the continued problems and lack of focus. I know they're trying to save the company, but the problems they face were of their own making. It's painful watching them do this. > Why you gotta be salty about it? I didn't mean it to come across as salty. It's just weird them asking their customers to be investors. Most businesses don't need to do this, and there are specific business structures available for those that do. Again, it's creating problems they don't need to create and it's painful watching them do this.
  - mnky9800n 4y ago
    Hi, you bought ice cream from my truck for 10$, would you also like to give me 5$? I'll give you some of it back if we make a profit one day. Oh, and I realize it took me a week to deliver the ice cream and it was melted by that point, but it would be nice if you could invest in our company. We are innovating in the ice cream space and innovation cannot have a price.

wander_homer 4y ago

The company seems to be in deep financial troubles. They've also been violating their refund policy and FTC rules as there are dozens of reports of customers who cancelled their orders months or years ago due to those absurd and frequent delays and they still don't have their money back.

fsckboy 4y ago
companies can't refund money they don't have; people who are owed money become creditors in bankruptcy. The company can, however, attempt to stay afloat and prosper enough to make creditors whole.
- deleted 4y ago
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- donavanm 4y ago
  Im not in the US, but here in Australia this would smell of “trading insolvent” and is a short path to piercing the veil/personal liability, fines, and prohibitions against serving as directors or officers for everyone involved.
  - MichaelZuo 4y ago
    It's a much higher bar in the U.S. to do so. Which is part of the reason why startups love moving from Australia to the U.S. but not the other way around.

deleted 4y ago

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goldforever 4y ago

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medellin 4y ago

Really wanted to support the phone development but im very glad i pulled out after it took over 6 months and they just kept pushing it out past the original timeline and then adding different versions that they would ship at different times.

pengaru 4y ago

This company is doomed. https://www.phoronix.com/news/Zlatan-Todoric-Interview https://www.phoronix.com/news/Zlatan-Todoric-Interview

flipperhero 4y ago

Purism are leading the Linux Mobile movement, with their investments in Phosh, GNOME, PureOS, and upstream development for the Librem 5. The Librem 5 remains the flagship device, in terms of performance, support and mainline support, though at a high price and lead time. Sparking and sustaining a field is tough, and it's clear Purism has had difficulties. I hope they get through these. I believe the movement relies on their existence and continued development.

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seba_dos1 4y ago

> So why does the email to their investors say it will be in stock in just 8 weeks, whereas their website says 52 weeks? That's simple - because the production batch that covers all the remaining backorders is already on its way: https://puri.sm/posts/where-is-my-librem-5-part-3/ https://puri.sm/posts/where-is-my-librem-5-part-3/

gjsman-1000 4y ago
Good enough that I just updated the article to mention it. However, the email sent to prospective investors specifically says In stock by July which is still questionable. Either that's wrong, or the claim of a 52-week lead time is wrong, or a 52-week lead time qualifies as "In Stock." Even if that is addressed in that blog post.
- seba_dos1 4y ago
  > the claim of a 52-week lead time is wrong It simply hasn't been updated and at this point likely won't be until it shows "in stock" instead.
  - gjsman-1000 4y ago
    They say in their blog post: > I’m starting to see the light at the end of the tunnel, but hitting shipping parity will depend on the E5 production run going according to plan, and our not hitting any more supply chain snags along the way. Because of this uncertainty, I have not yet updated our 52-week lead time on new Librem 5 orders, and will likely not update it until the E5 production run is complete and waiting for its turn to ship to customers. [...] So, they are keeping the 52-week out of "uncertainty". Which is fine, by all means. However, they are quoting 8 weeks to investors without mentioning the uncertainty. Which is legally worse? Misleading customers, or misleading investors, if that uncertainty materializes? Especially on a sale that does not appear to meet other legal checkboxes like investor status verification?
    - seba_dos1 4y ago