Unfortunately, our company is one of many victims that have been identified through an investigation into money raising activities made on behalf of Mr. Austin Veith. Victims include a few investors in UsedTunes (also known as uMedia), Jon Nordmark who is UsingMiles CEO, Wambo Commerce, and a number of other individuals who have invested in Austin or his companies in the last 5 years. Mr. Veith has no current association with TravelFli / UsingMiles.com, not as an employee nor a shareholder.<p>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.<p><a href="http://www.entrepreneur.com/article/219660" rel="nofollow">http://www.entrepreneur.com/article/219660</a><p>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.
I've had the misfortune of working for someone in New York City who was running a similar operation. But I think he stays just inside the law. He announces that he has a seed fund for startups. He spends all of his days pitching investors. He then pitches his ideas, usually working in concert with one or more partners. He then hires 2 or 3 programmers to work on the idea. He pays himself very generously for his leadership skills. For one of his projects, he might raise $100,000 in 3 months and then pocket $20,000 as his fee for providing leadership. The rest goes to the programmers. And he might have 3 or 4 such projects going at the same time.<p>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.<p>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.<p>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.<p>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.<p>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.<p>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.<p>Anyone involved in the startup world should be aware of operators like this.
So in comparison, if law enforcement has an "economic crimes unit" and can "follow the money" and get to the bottom of this, why hasn't anyone in the financial industry/wallstreet been arrested/prosecuted for the financial collapse?
I submitted this with a "TechStars Boulder 2008" part added to the title, why was it removed? I see "YC" references to companies in titles all the time so isn't that relevant info?
I hate to see investors' money wasted on "hookers and blow", when there are so many startups out there which could really use the money to grow their legitimate operations.
Sad story. Bad apples are everywhere, and when you work with a hundred entrepreneurs, 99% are genuine, and then you get the con artist. It's so hard to spot at first.
Will this effect usingmiles.com recent $2.7 million round of funding? <a href="http://techcrunch.com/2011/04/06/usingmiles-raises-2-7-million-for-rewards-management-platform/" rel="nofollow">http://techcrunch.com/2011/04/06/usingmiles-raises-2-7-milli...</a>
what do you need a $10K apartment in NYC for? That's pretty much penthouse territory.<p>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.
Bummer.<p>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.
I love this part of the article:
"In 2010, Nordmark paid $25,000 for a patent on a new online digital used music and book website that Veith was pitching, dubbed UsedTunes.com. The site exists but isn't operational."
This is further proof that raising money does not make one inherently more trustworthy. Unfortunately, on July 1, California law will reflect that very notion.<p><a href="http://www.quora.com/Aaron-Greenspan/In-Thirty-Days-Payments-Innovation-Will-Stop-In-Silicon-Valley" rel="nofollow">http://www.quora.com/Aaron-Greenspan/In-Thirty-Days-Payments...</a>