The situation has no effect on UsingMiles.com day-to-day operations, and our passionate founder and employees are 100% focused on building a wonderful new world-class travel service! In fact, UsingMiles.com is the ONLY frequent flyer travel tool that was just named one of Entrepreneur Magazine’s “100 Brilliant Companies.” We are honored to accept this accolade.
http://www.entrepreneur.com/article/219660
Moving forward, we intend to fully cooperate with the law enforcement and hope that the innocent people involved in this situation can find justice. We thank you for supporting us through this process.
[1] http://milepoint.com/forums/threads/usingmiles-travelfli-fou...
Technically, this is not a scam. He raises money and spends most of it trying to build startups. But I did have the sense that his focus was very different than what I expect of most of the Hacker News crowd. I had the sense that he didn't really give a damn whether any of his projects succeeded. He was making a very good living just raking in dollars from investors. And of course, if the investors are dumb enough to give money to him, then in some sense they deserve what they get.
I recall that for all of the many meetings we had, he never mentioned customers a single time. He only talked about investors. He talked a lot about "the deck" (the PowerPoint presentation he would use to dazzle potential investors), which he constantly tweaked and polished. His only interest in the programming was to show some progress so that he could ask for more money. And then after a few months he would claim that the idea had failed to show traction, and he would move on to the next idea.
Any boom will attract a certain number of parasites. I had the impression that he was manipulating the rhetoric about a tech boom in New York City to sell the idea that investors needed to get in on the action, via him.
It was intriguing to realize that this was even a possibility. For me, when I'm part of a startup, I'm generally willing to sacrifice some of my current income for the sake of seeing the startup maybe succeed. But this guy was playing the opposite game.
He was very smart. And he invested enough of the money raised that no one could accuse him of running a scam. And yet, I had the impression he was just barely legal -- just barely doing the minimum so that no one could accuse him of running a scam.
He did have one success in his past, which I think made his whole operation possible. He was sort of like the aging actor who had a popular show 20 years ago and nowadays does infomercials. That one hit gave him the credibility to run his almost-scam.
Anyone involved in the startup world should be aware of operators like this.
When Goldman Sachs creates a fund of stocks at the direction of a private investors who intends to short these stocks, determining the illegality is a more difficult problem (http://www.telegraph.co.uk/finance/newsbysector/banksandfina...).
The crime of this guy seems to be taking a larger cut of the money going through his hands than he claimed. If he was enough of a "rain maker", he might conceivably have openly demanded the money that he was skimming and then there would be no crime. But he either wasn't a big enough "fish" or simply a sociopath who couldn't help lying and stealing even when he was making bank.
I think a number of folks argue that the most successful businesspeople "surf the edge" between normalcy and sociopathy. I would add that when the business environment is closer to "bubble-dom", the true sociopaths can rise but when the "tide goes out", these characters go to jail - we saw that in the last two crashes.
http://en.wikipedia.org/wiki/Psychopathy http://en.wikipedia.org/wiki/Antisocial_personality_disorder
And, yes, "because Wall Streets runs the country" is fine simplification of the situation too...
At the same time I do not think just because this is a site ran by YC that we should not have titles with TS in them. You could promote TS companies here all day, it will not make a difference for YC.
I mean I can see if you are already making millions...but if you are just a startup that should be a big red flag to investors.
Someone -- I think a startup founder I know and that people have heard of, but I could be wrong -- related to me that when he got a series A or B, the background check was so thorough that the investors noticed he'd accidentally let his drivers license lapse and had an unpaid parking ticket.
http://www.quora.com/Aaron-Greenspan/In-Thirty-Days-Payments...
