David Rice — Why I’ll Never Trust This “Investor” Again
This is my story on why I’m convinced David Rice completely stole my business idea while posing as an “investor” to help me grow my startup. This article is not going to skewer David Rice. I’m not even going to call him names or make memes about him. I’ll let you be the judge of David by the merits below. This is my story on how I learned a valuable lesson about who I trust.
Four years ago I joined an Arizona Technology Council committee aimed at helping startups in AZ. We worked together on creating an event called, Startup Connect AZ. David was a leader in this group and repeatedly introduced himself as an active investor. He wanted to meet with me on many occasions and even asked if I’d relocate my company to his new incubator in Tempe called Desarollo. I never felt good about it and decided to stay put.
Fast forward to spring of 2017. After a couple years of not hearing from David, he gave me a call out of the blue. Mentioned to me that he was investing into a local technology recruiting firm and wanted to learn more about what HR technology tools i’d been working on to see if there was a chance of joint innovation. I agreed to grab lunch with him at a nearby Chick-fil-a.
We met March 14th at Chick-fil-a in Scottsdale and I shared with him about my newest product launch, VIVAHR. I explained how we were getting ready to launch an amazing new software platform to change how SMBs recruit and hire. He probed for more details, I said I’d share more later. He probed more by saying “I love innovation and have made some big investments recently in the HR tech scene. I’m about to exit one really soon and would love to use that exit to secure my next investment. Tell me more.” As an vulnerable entrepreneur, I shared with him more in depth about our plans for VIVAHR. David was very excited. He expressed wanting to look deeper into what I already had and get an idea of where I was at. I gave him access when I got back to my office to a free account so he could poke around and decide if this was an investment he was ready to discuss further about.
Sure enough, he called me back. He anxiously expressed how much he loved our platform and saw “unlimited opportunity in front of us.” He wanted to meet as soon as possible to talk more about how he could bring “resources” to the table well beyond his own investment. We made plans to meet again the next week on Wednesday the 22nd of March.
David Rice arrived on-time and excited to meet at my office. We met for nearly two hours. He asked all the right questions. He shared with me ideas on innovation and his ability to gain instant access to top developers so WE could grow this platform together. There are far more details to this meeting I want to share, but will abide to my legal counsels recommendation to not publicly disclose.
After some silence for a couple weeks from David, I got a phone call from him at my office. He wanted to know where I was at and if I wanted to meet again. I honestly didn’t feel good about it. There was something deep in my gut saying, “run, this guy is a total scam artist.” I declined to meet with him and told him I didn’t feel like the timing matched up. He made it very clear I was making a bad choice.
As an ambitious entrepreneur who is easily flattered when an investor makes strides at you, I felt torn. I wanted so badly to feel validated that my startup was worth someone “investing” into. I have shared with many fellow entrepreneurs to never get trapped in the false narrative of investor validation being more important than the customer validation. I fell into my own warning. Thankfully I was able to recognize it, and move on quickly.
Less than two months after David and I met, he launched a new business also called VIVA. I was shocked to see it. I couldn’t believe the words on this new website were word for word what I had said in our meetings. The entire pricing model, audience and focus were exactly what I had shared. Mostly, I was sad. Sad that a guy I had held in such high regard, had such little respect for me, or any other entrepreneur for that matter.
I never made David Rice sign an NDA. In fact, I often don’t request it or bring it up with any investors I meet with. I hate it. I hate that feeling of instant disrespect and letting them know I have trust issues. There are many ways you can look at it. That’s just how I feel. That has to change. It has to change now. As entrepreneurs who literally sacrifice EVERYTHING to go into their startup, it hurts too much to see someone swoop in and steal it with no respect, no morals, no regard to the sacrifice along the way. If you’re an entrepreneur who’s been on the fund raising trail, I’d love to hear your comments and recommendations to me and other entrepreneurs on how you approach this subject.
In a small growing ecosystem of Phoenix, there can be wolfs in sheep’s clothing. Just because someone labels them self as “investor” you should not be ready to talk trade secrets, strategy or insider information. You need to vet the investor as much as they’re trying to vet you. Know exactly who you’re working with.
Listen to your gut. I’m so glad I followed through on my internal promptings. There was a lot more under the hood I almost shared, but thankfully listened to myself. If something doesn’t feel right, listen to yourself.
Take meticulous notes about meetings, conversations that you can always fall back on with exactness. It is important to take notes and timeline conversations. This can be a tremendous asset months or even years later. I recommend taking a few minutes after every meeting to note out promises, statements and final thoughts. Keeping these in a digital form such as Evernote can allow easy search by names, dates and locations.
A couple things about David Rice you should see:
Here is my original logo of VIVAHR when I showed him my product the first time:
Here is the logo he is using:
Purchased this domain exactly 3 days after meeting with me and seeing my platform. March 17th 2017