MeVC Faces Shareholder Lawsuit
from the that's-what-happens dept
A friend of mine was one of the first employees at MeVC, and soon after he joined we’d had a conversation about the problems that such a venture could face. There’s a reason why most people try to get money from accredited investors instead of the general public. In a bad economy, it can really screw things up. Turns out, that was just part of the problems that MeVC has faced. Part of their business model was to build on the connection they had with VC firm Draper, Fisher, Jurvetson, but the SEC apparently ruled that was a conflict of interest. Now, one of the largest shareholders in MeVC is suing the firm saying they need to adjust their (somewhat high) management fees seeing as their biggest asset (the connection with DFJ) no longer exists. Furthermore, they haven’t been investing nearly as much as they expected to, and certainly haven’t had any success stories yet. Admittedly, there aren’t many VCs who have had many big success stories in the past couple of years. However, the folks who set up MeVC set it up as a public company – and as such they should know that public investors often have even shorter time frames in judging success stories.
