[brianwawok]

I literally do not understand. What is the other side of the story? Why would someone go through all this trouble of a fake investment? Clearing buying 10% of a company for 200k with no check is a game that only lasts for a few weeks???

[gwern]

There's at least one possible motive: they never got the money from the ads he was selling on their behalf, which were affiliate links. So he kept all the revenue from that. The longer they kept his ads enabled, the more ad revenue he could steal. Of course, when the mark finally figures it out, they can sue him for fraud... at least, if they still have money for lawyers. One way to distract them and stop them from checking the invoices or raising capital for lawyers is to drag out a fake investment. Seems to've worked. The startup went out of business and he kept all the money. Given how much they told him and were friendly with him, and as part of the due diligence, he probably knew pretty exactly how much they had left in the bank and were burning per month.

[compiler-guy]

The sales scam is

A) sell the ad-space to random companies B) collect the money from the advertisers C) don't pay the host

The investment scam is:

Eventually own the web site without paying for it. Risk? Low: the owners don't have any money to pursue a legal judgement. It looks like he is getting away with it.

[codingdave]

The Simon guy never got to the last step, which almost certainly would have involved some variation on them just having to pay some closing fees to make the deal go through. It is a scam... just conning them until they say, "Oh, sure, for 350K, we can pay 10K in fees." And he runs away with that check.

[beachstartup]

there's nothing to "understand". you assume there is a logic to their actions. there isn't. the guy was a scammy bullshit artist, a wannabe business man who talked his way into others' confidence, and probably has mental issues. these people are out there, and you need to watch out for them.

on a side note, it takes guts to post a story like this. most people don't admit when they are taken like this. they're lucky he didn't try to steal money from them directly.

[gnaritas]

There was logic to his actions, he stole their ad revenues and kept the money while dangling a carrot of big investment to keep them from noticing. Scammy bullshit artists still have goals.

[VLM]

Something relevant to keep in mind is the scammer is not obligated to have a one track mind. He has 25K of their money, as far as I can tell still has it and based on the guys history has run this many times. He can run this scheme in parallel perhaps 10 companies and for 9 he disappears and the tenth he spends 250K and owns a chunk of a "4M company". Note that he ran for the hills when he got in over his head and figured out that giving a "4M company" that folds when it loses 25K is probably not a good use of 250K. Some other company will be getting that 250K.

[wingerlang]

I think he is asking how that guy cashed in on this.

And I believe the answer was that these guys basically displayed affiliate links that gave him cash when clicked.

[sedeki]

No, I don't think "Simon" meant to cash in at all. As the parent post said: probably mental issues. These nutjobs aren't looking to get to rich, as much as pretending/be perceived to be rich.

[beachstartup]

yeah, hence

> lucky he didn't try to steal money from them directly

[kev-reframed]

I have been wondering this for a long time. Looking at the way he positioned himself it is almost as if he just wanted to feel important. He came into our building and told them he would become a sponsor. So right away we were seeing his company name next to the door and events he was organising - putting him above everyone else in here.

Then we later find that he has been organising events within the building and setting himself up as an investor. So he is getting people to speak up to him and pitch to him and make him feel important.

Perhaps because my business partner and I treat people equally the money he was offering had to keep going up until he felt we viewed him in an way that was important or necessary.

perhaps he was waiting for us to be unreasonable so he could have a fight and pull out dramatically and no one would have to know he didnt have the cash, but we weren't unreasonable. I hear he was already faking evidence that he had paid his other invoices he owed.

I don't really understand what his game is and he wasn't charismatic at all, like I picture a con man to be. I'll let someone else work it out and focus on building

[baking]

Presumably, collecting money from advertisers, not paying expenses (rent, employees, invoices) and stalling the inevitable by proposing ever increasing investments.

[epicaricacy]

They ran his ads for weeks. He got all the advertising revenue.