It’s a fantastic story that tells us The Register. The English-language media explains how the SEC is currently suing a Florida-based startup for lying to its investors in order to raise $1.3 million. A substantial sum, therefore, that the CEO would have even largely diverted for his own benefit while lying about the capacities of his company.
Originally, the value proposition ofOi2Go Media Technologies Inc yet has something to seduce. The firm wants to be a choice alternative to Netflix, focused on Latin American content. This is enough to convince a significant part of the population in the United States, where this origin still represents 23% of births according to the CDC. Except that in reality, the app promised by the publisher is largely not functional. However, the least you can do when a company wants to attract new shareholders is to offer an MVP or a certain growing base of loyal customers. But neither was apparently there, according to the Securities and Exchange Commission…
Totally unjustified expenses
Among what is reproached to the leader of Oi2go, namely Anthony Michael Hernandez, we therefore find funds used for personal purposes. Within the movements in question, the CEO notably transferred over $18,000 to his girlfriend. With this, the company’s bank cards paid for meals, coffees, refueling, trips and jewelry for a total of approximately $170,000. But that’s not all, since it happens to be a bonus that the application – which nevertheless boasted as one of the most effective on the market – hid many secrets from its investors.
Indeed, the pitch deck intended for the latter mentioned, for example, income from many sources such as licenses, user subscriptions or even the campaigns of certain advertisers. But again, wind: the SEC has serious doubts about all these assertions, not to mention the fact that the organization ensures that the Oi2Go platform was generally out of service. Even Salto, with very limited market shares in France, will have done much better.
Positioning too good to be true
Among the other slides of the deck that won over investors, we also find the traditional comparison with other key players in the market. Each column then corresponds to a platform: Netflix, Hulu, YouTube, Amazon Prime Video and Oi2Go. On the ordinate is the list of competitive advantages, fourteen in all. Of course, only Oi2Go ultimately ticks all the boxes, including “significant mobile presence, “live TV” or “user-generated content”. But again, these arguments do not hold water: the app presented would actually be a simple concept. Not enough to compete with catalogs as extensive as the competition.
For the moment, the victims of this scam have not been compensated. But the SEC requires that a repayment in good and due form takes place. Penalties are also planned, their payment being still pending at the time of writing these lines…