Ozy Media may have a securities fraud situation that has nothing to do with its infamous conference call.
running news: Nerdshala has learned that OG solicited potential investors this year by saying that Google Ventures has agreed to lead a new funding round, but three sources close to GV said no such offer was made. Was.
- A source says that GV and Ozzy had exploratory talks in the past, but in 2021 there were no talks.
- GV declined to comment citing pending litigation.
We before this inquiry details This “Series D” funding round, which is said to have been completed by Ozzie CEO Carlos Watson, was completed by some employees. There are no relevant filings with the SEC, nor was there a press release or other public announcement.
what do we know:
- On Monday, a multi-family office for athletes and entertainers said in trial That Ozzie and co-founder Samir Rao told him that “Alphabet or one of its Google partners” had agreed to lead the Series D with an investment of approximately $30 million. It invested $250,000 in the round, after the current $2 million investment, and now wants all that money back.
- Watson on Tuesday said “The Breakfast Club” radio program that Google made a written offer to invest $25 million.
- In June an AngelList syndicate began soliciting more than $100,000 in co-investments for a Series D round. Nerdshala, offering documents and other confidential communications, said Google Ventures was leading at a $450 million pre-money valuation.
- One of the syndicate documents included this remarkable footnote about Ozzy: “If sensitive data is lost or something goes wrong in a high-profile way, a company could lose a ton of customers.”
- Syndicate was fully subscribed at the end of June, but kept the money in escrow as it waited for documents from OG to close which never came. Days after the scam came to light in late September, Syndicate emailed investors to say: “Due to recent developments surrounding the company and the structure of the round, we are unable to proceed with our investment in OZY Media. Your funds will be immediately returned to your AngelList account.”
- When I asked one of the syndicate organizers, who had told her that Google Ventures was leading the round, she replied: “Ozzy, of course.” He said that the syndicate’s talks were with Sameer Rao and not with Carlos Watson.
Warning: It’s possible that GV has proposed, and its lack of commentary is more about embarrassment than litigation. But it would also mean that OG decided to take a not-so-needed investment from a blue-chip investor.
For the record: Carlos Watson did not respond to Nerdshala’ requests for comment. His Crisis PR rep, who had just joined a few days ago, is still not working with Ozy. Former OG chairman Mark Larry also declined to comment through a spokesman. Law firm Paul Weiss, appointed by the board of OG last week to launch an independent investigation, never launched an investigation and is no longer involved.
Bottom-line: “Fake it ’till you make it” can work when it comes to social media marketing, but not when soliciting investment.