Are You And I Witnessing a #PropTech Startup Scam?

Scam, Ponzi, Con Job, Racket…..call it what you want.

Oh, and for clarity, I’m not talking about blockchain, well maybe I am but not specifically in this context.

If you haven’t noticed via my Twitter or Instagram accounts I am out and about all over Manhattan just about every day.

It’s meeting after meeting and coffee after coffee with a business dinner or event of some sort thrown in often.

I can’t remember the last meeting I had the was not about #CRE and or #TECH.

The ecosystem is indeed global in scope but I still say New York is the center of that universe.

The pic above was taken by me walking across the street on my way to a networking dinner this past week.

I had a fascinating conversation with two architects about BIM, the built environment and the ever-present fuel of the tech world that is data.

One of the topics we touched on was the tremendous amount of money now pushing #Proptech.

I have written this before but just about every day there is some kind of announcement about some company you may or may not heard of raising 10-20-30-50-100 million plus dollars to “further the scale and growth” of their #Proptech baby.

When I see something like that the first thing I think about is how much some of the founders take off the table for themselves to “incentivize” there further participation of the company.

Reread that.

Taking money from the raise and pocketing it personally.

And you may be asking yourself how?

Simple, they just do it.

You get a commission for the service you provide right?

Is there a difference?

Is it apples to apples or apples to oranges?

If you are the one filling up your personal account it’s sure as hell apples to apples.

Is there some kind of ethical or moral issue here?

Here is my take. (What, an opinion from me, how dare I?)

Let’s start with the reason for the money raised. It is indeed to fuel growth and scale. Fair enough.

Another reason is to build a sustainable business with recurring revenue. Fair enough again.

The end result of both of those is to ultimately return the investors money …how?

The sale or acquisition of the company at a profit. That can be accomplished in many ways.

BUT…

Name me more than 5 in the last 5 years that have been sold.

Come on. It’s a stretch is it not?

Here’s where I get to piss on a few people. (As if I give a fuck.)

What happened or is happening to all that money?

Seriously, I’m asking.

I have a few ideas.

Trips lot’s of trips…all over the globe to “market” and not in economy class either.

Is Ascot a #Proptech event? If it is how about some of my British friends hooking me up next time.

Wait, yea its team building and company culture to do that stuff. My bad.

I heard skiing is popular. Last time I looked Manhattan is flat as hell.

Wait, yea its team building and company culture to do that stuff. My bad again.

How about uh, hard assets?

How about hard assets put in the name of the founder or the founders family? Funded by…..the startup?

Hey, give them credit, turning that #Proptech magic into personal wealth via real estate.

Hard to argue ..or is it?

Ok, I will take a shot at the blockchain people.

How many have just spread a little blockchain fairy dust on some kind of pitch deck to raise one penny?

Go look in the mirror. I said go look.

How much total bullshit is that? Total!

Here’s a question, is anyone willing to show their REAL balance and expense sheets?

You and I know that answer…HELL NO!

What are you hiding?

It got you millions.

It got you set up and cozy in an apartment.

It got you flying all over the globe talking………SHIT?

So far????

I’m not the first one to ask these questions and I am not the first one to write about this either.

I’m known for no filter.

I’m known for going after any subject with no fear.

Do I care if the startup people get pissed? Hell no.

The only ones that will scream are the ones worried about…getting caught.

Is it ethical is it moral is it just business?

Or is it FRAUD and Criminal?

People take serious shots at the blockchain community and I am one of them.

We can see it and smell it.

Are we too close to this side of the real estate to possibly not see the use of all that money for personal gain?

And at what cost? Maybe there is none….none to the people who are “using” the money.

Do you want me to name names and call them out?

Uh, I don’t work for you and that’s not my fucking job.

Where is the revenue?

Where is the growth?

Where are the customers?

Where is the scale to justify the spend?

Better yet where is the real spend!

Is writing about stuff like this harmful to “the ecosystem?’

I obviously don’t think so.

But…

Are You And I Witnessing a #PropTech Startup Scam?

 

+1 Solution to this? Buy companies with revenue and customers. Don’t Bet BUY!

+1+1 What did I leave out?

 

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