Startups are a great way to launch your career as a tech entrepreneur. There are many benefits of joining a startup company. You get to learn from the best, you get to make decisions and take risks, and you get the opportunity to grow and shape your own career.
The tech industry is growing at a rapid pace. And with that comes an increased need for people who can help build and grow these companies. Tech entrepreneurs are in charge of taking the idea of a product and making it into reality. They are the ones who find investors, hire employees, and find ways to make their company stand out from the competition. As an entrepreneur, you need to know how to navigate your way through the legal system, which includes knowing what types of laws apply to your company as well as what they mean to you.
Dark sides of tech entrepreneurs
There are some serious downsides to the technology business. Scams, lawsuits, disputes, legal actions, and fraudulent acts are becoming common in the rapidly expanding digital industry. Financial mismanagement, moral degradation, and excessive greed are destroying the future of tech entrepreneurs. In the following blog section, you will learn about some tech entrepreneurs that succumbed to greed.
Elizabeth Holmes – founder of Theranos
Elizabeth Holmes, the darling of Silicon Valley, is one of the most divisive figures in the tech world. She was born on February 3, 1984, and has always been an ambitious young lady. She had an outstanding academic record and was accepted to Stanford University to study chemical engineering. Steve Jobs inspired her. Holmes had dropped out of Stanford and began working on her dream company, Theranos, in the basement of a college house.
In 2003, Holmes established Theranos as a medical technology company and claimed to have created a revolutionary blood-testing device. The CEO of Theranos, Elizabeth Holmes, declared that their device would detect the presence of cholesterol and cancer by taking a single drop of blood as a sample. These discoveries astounded the entire medical technology world. Theranos rose to prominence as a pioneering symbol of the medical revolution. Theranos raised more than $700 million from potential investors, including Oracle founder Larry Ellison and Tim Draper. Elizabeth started to be called the “Female Steve Jobs.” As the CEO and the founder of Theranos, she was living her dream life. At one point, Holmes was the world’s youngest self-made female billionaire, with a net worth of around $4.5 billion. But things started to fall apart when her company was accused of providing inaccurate blood-test data. Her staff began to expose that Theranos supplied incorrect blood-test results, and despite knowing this, the CEO did nothing and attempted to conceal such sensitive information. The Department of Justice and the Securities and Exchange Commission also charged her with significant wire fraud and conspiracy, and she paid a $500,000 fine. Finally, she was guilty on four of eleven charges. It includes three counts of fraud and a count of conspiracy to deceive private investors in the blood-testing startup. Holmes is out on bail but faces up to 20 years in jail, though some experts believe she will receive less because she has no prior criminal record.
Manish Lachwani – Co-Founder of Headspin
Manish Lachwani inspired emerging tech entrepreneurs, particularly ambitious Indian tech entrepreneurs wishing to do business in the software industry. Manish created the operating system for Amazon’s Kindle line of products. He was also Appurify’s chief technical officer. Google bought Appurify, the first mobile device cloud, in June 2014. In a nutshell, Manish’s skills were evident practically everywhere he worked. He co-founded Headspin, the world’s first AI Testing and Dev-Ops Collaboration Platform, in 2015. Everything was going well until the need for more profit began to consume him.
In 2021, Manish Lachwani was arrested on a severe accusation that shocked Silicon Valley. Manish was charged with violating anti-fraud laws by the US Department of Justice and the Securities and Exchange Commission. Manish misrepresented the sales information, exaggerated vital financial parameters for the firm, and obtained more than $100 million from investors between 2015 and 2020. At the same time, he altered his firm’s profit margins and presented investors with a fictitious valuation of his company. In front of investors, he dishonestly reported that the firm was producing revenue at a suitable pace and that overall growth was stable. He even persuaded the employee to include revenue from past customers who were no longer clients or consumers of Headspin. When an audit took place in May 2020 by an auditing firm, the truth started to unfold. Headspin stated that the company generated $95.3 million in sales during the first half of 2020, and the auditing firm discovered the revenue was just $26.3 million. At the same time, Headspin reported a net loss of $3.7 million until the first half of 2020. The auditing company later found that the net loss was $15.9 million. The fraud allegations against him may result in a maximum sentence of 20 years in prison and a $5,000,000 fine.
Vincent Lam – Founder of Matidor
It takes a lot of effort and brainstorming to develop software, but have you ever considered what would happen if you failed to maintain the security of your software system and it fell into the wrong hands? The fraudulent act committed by Matidor’s inventor, Vincent Lam, is a perfect example and a remarkable incident that will make you realize the value of software copyright protection.
Many corporate project managers rely on Ark Innovation Technology’s superior mapping-based project management software. However, its users were puzzled when they discovered the same type of mapping-based software branded Matidor, which claims to be Ark Innovation Technology’s sister company. When Ark Innovation Technology officials started digging, they came across something surprising. Matidor was determined to be Vincent Lam’s brainchild, a former Ark Innovation Technology co-founder. Things got even stranger and more alarming when they realized that the source code used in Matidor’s software had been stolen from Ark Technology.
When the inquiry began, it was discovered that Vincent Lam from Vancouver had copied the source code for the mapping-based management tool before quitting. Federal Judge Nicholas McHaffie convicted Vincent Lam guilty of copyright infringement after two years of legal fighting. The court issued a verdict against Matidor Technologies Inc. of Vincent Lam. Also, it issued an injunction that to prohibit him from using the software and promotional materials that were initially owned by Ark Innovation Technology. The court also fined Vincent Lam $277,400 for causing damage to a prestigious software company. It is a rare case and a significant example of software copyright infringement.
Issac Choi – Founder of WrkRiot
Issac Choi does not deserve to be classified as a tech entrepreneur. Instead, he is a full-fledged con artist devoted to violating the rights of his tech staff through deceptive strategies. The placement of his name on the list is intended to alert aspiring and new IT professionals to undertake extensive background investigations on the CEO and the company’s sustainability before joining.
WrkRiot was started in Santa Clara by Isaac Choi with the slogan “no games, only employment.” The staff pay and incentives were highly tempting. However, inconsistencies began to emerge when Penny Kim, the marketing director of this so-called company, published a Medium article titled “I Got Scammed by A Silicon Valley Startup.” She began to suspect that her CEO, Issac Choi, was not who he claimed to be. Issaic Choi lied to his employees about his educational and financial credentials. He gave his staff the idea that he was a millionaire who worked for IBM and owned a successful multinational mining company.
However, doubts began to arise when employees did not get their paychecks on schedule. Issac Choi made up excuses for why they weren’t getting paid. Penny Kim, the marketing director, discovered that Issac Choi had borrowed thousands of dollars from one of their employees. When the employees lost patience with their salaries, Isaac Choi produced a fake wire transfer to convince them that their wages had been paid. Penny Kim filed a pay claim at the DLSE office after realizing she and the other employees were being scammed.
Issac Choi was arrested in 2017 for Defrauding Employees. He could face a maximum penalty of 20 years and a $250,000 fine. Issac Choi admitted to creating fake wire transfers and confessed to other fraudulent activities, including fake financial and educational credentials.
About the Author
Wali I. is an SEO Link Builder at LinKRanKseo.com and an Independent professional at Upwork. Wali I. has been working with internet marketers in various Off-Page SEO and Link Building projects in the last eight years and has gained valuable experience in this field. Wali I. also has a strong involvement in the affiliate marketing industry.
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