Anchorage Capital Goddam

Hi, I am Danny Boice. The (as of this writing) Founder and CEO of Trustify.

There seems to be some coverage appearing regarding this Anchorage Capital “lawsuit.”

I use lawsuit in quotations because typically when there is a legitimate legal matter tried before a court, the defendant doesn’t read about it in the media for the first time.

I’ve only heard from one journalist asking for my side of the story or even for comment. He ran his story before I had a chance to reply (less than 12 hours).

I have put every single dime I have into Trustify. Including our life savings and my children’s college funds. I am currently in the process of filing bankruptcy as I haven’t received a dime of compensation from Trustify in nearly 12 months in addition to putting far more into the company than I ever received in compensation of any kind.

Despite all of this I find myself named personally in a lawsuit from Anchorage casting the widest of nets related to frivolous and easily disputed claims and a slew of generally personal attacks that they know are just not accurate.

Anchorage, a self-described “Cayman Islands” “Offshore” fund has set out on a seek and destroy mission conducted by a group of old white male one percenters and their silver spoon trust fund inheriting lackeys.

Since I have no money — only time — I’ve decided that the only recourse I have is to start blogging here to set the record straight.

At a high-level Anchorage Capital approached me — a first-time CEO, heavily tattooed, from bumfuck Virginia, with no college degree, publicly confirmed to be mentally ill, coming off a failed startup (Speek), and a well-established disdain for trust fund babies with a pre-emptive offer to fund Trustify’s Series A round.

The term sheet we received was effectively a “friends and family” round term sheet, not a professional venture capital Series A standard term sheet. Our counsel at the time described it as shocking and unlike anything he had seen in his 20+ years career.

The shareholder agreement, subscription agreement, and other round docs were also more like “friends and family” round docs than professional venture capital docs.

Anchorage did not ask for a Board Seat. Anchorage did not ask for any changes to information rights provisions.

Anchorage didn’t even ask me, the CEO, to so much as sign a non-compete, PIAA or employment agreement (I still have not signed any of these things to date — only because no-one asked me to).

Anchorage was very careful to “screw” (using existing investors words) previous investors by meticulous choosing to invest $4.75M rather than $5M which would have triggered a bunch of note conversions from a prior round.

It was a bush league circus all the way.

We took the deal. A startup founder would be crazy not to.

Throughout the next year/s the company came under attack by a myriad of Internet trolls and hit our first rough patch since our founding.

Almost immediately, Anchorage attempted to pressure us into changing the terms of our agreements ostensibly for fear of having egg on their face to their LPs. Here is one email exchange but there are others that I will share in the future.

I responded that I don’t think that’s a fair or even reasonable request and that, further, I need to focus on navigating Trustify through the current rough patch so that there is a company at the end of all of this. I also stated that if I have to shift my focus to arbitrary legal and financial pressure by Anchorage, then I am merely going to find something else to do as the company will undoubtedly fail and I didn’t found Trustify to waste time on fund politics bullshit.

Within a matter of weeks, I find myself reading in the press about a lawsuit that I am personally a party to before even being served. I also see myself receiving inquiries from Governmental Agencies citing Anchorage’s lawsuit as justification for their investigation before my having been served or obtaining a copy of the suit myself. Have you ever tried to get the local police, much less the FBI to investigate something? For the average 99%-er, it’s nearly impossible. It would take Anchorage partners calling in mommy and daddy’s political donor connections and other favors that only the real one percent have to make this happen.

As if it’s bad enough that my dream company ultimately failed just a few years out of the gate. I am currently experiencing a concerted attack on my livelihood, my family, my ability even to get a job ever again.

All because a stodgy old hedge fund run by old rich white guys decided to “get into startups” and screwed it up.

I would caution any of my fellow early-stage startup founders and CEOs from taking money from such an outfit. I would also advise any LPs in Anchorage to seriously question whether this outfit is one that you want managing your money. As we should all remember that outfits like Anchorage don’t invest their own money — even though on average the partners and principals at such a fund have inherited exponentially more money than any of us who have had to work for a living — they are merely middlemen placing arbitrary bets with other people’s money.

Not to mention the fact that our investigators found a LOT of concerning information regarding high-level executives at Anchorage over the years. I’ll start to share some of that information as we go too.

Since I am not receiving requests for my side of this from any of the outlets who thoughtlessly republish Anchorage’s ridiculous and frivolous lawsuit taking allegations from it verbatim and citing as fact, this post can serve as my first official comment on the matter. There will be more to come where I delve into the specifics as I can get to it.

Again, I have nothing. I am bankrupt. I lost my family. I lost any ability even to find the most low-level of jobs.

I am, in every way, exponentially worse off than I was before starting Trustify. Especially financially.

Ironically, the primary claim by Anchorage is that I somehow enriched myself through the running of Trustify. This frivolous claim doesn’t even pass the sniff test at the highest level, and a minimal amount of diligence before attempting to eviscerate my family would have shown this.

All because a “have not” had the audacity to conceive of a company and attempt to build it using capital controlled by the “haves.”

Certainly doesn’t sound like what the Country’s founders had in mind when conceiving of America.

Lots more to come.

- Danny

P.S.

For any Nina Simone fans out there, I am by no means comparing this nonsense with the civil rights struggle. IN NO WAY. I just happen to be a fan of Nina Simone and loved the way she articulated things.