Business intelligence as a tool for risk mitigation by@molfar

Business intelligence as a tool for risk mitigation

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Company competitive analysis, pre-due diligence. Personnel screening. Market research.

Intelligence is a political, management, jurisprudence and due-diligence tool. There are fewer investors than startups, so an investor often finds itself choosing between multiple applications and putting their money into one or two companies. Venture capital investments are risky, taking into account how disingenuous startup founders can be. 

Steve Tan raised $1.5 million on Indiegogo, a crowdfunding platform, promising voice- and gesture-controlled smartwatch to his contributors. Then he was accused of buying a Ferrari and shopping in luxury boutiques for that money, with Facebook photos presented as evidence. According to Steve, it was his friend's Ferrari, and the picture was taken 4 years ago in Italy. However, he made no comments regarding the boutique photos. The smartwatch was launched, albeit in an unfinished state, and the company eventually closed.

Josh Tetrick, the founder of vegan mayonnaise producer Hampton Creek, made his employees buy their own product in 2014 to inflate demand and attract investments. By the end of that year, the startup closed a $90 million deal.

The founders of Ukrainian startup Easy Ads, stopped communicating with the investor just three months after receiving $25,000 in investments and ultimately disappeared.

The story of Elizabeth Holmes and her startup Theranos began with a $700 million investment and a peak valuation of $10 billion in 2014 and ended with a book titled Bad Blood: Secrets and Lies in a Silicon Valley Startup and people dressing as Elizabeth on Halloween.

In 2019, competitive intelligence company Molfar performed 237 background checks on partners, startup founders asking investors for money, and candidates for top positions. Let's consider one notable case.

Mr. Frankel, a famous businessman, had a lot of friends among prosecutors, senators, industrialists, and bandits. One day, one of them tipped him off on a certain Baker Estate property. Mr. Frankel wanted to evaluate the risks of the new investment project to see if it wasn't a complete flop. Therefore, Molfar was tasked with checking if the owner - a certain Mr. Carter - was a reliable person. A certain Mr. Parker G. Carter.

A search through various business registers yielded 30 something legal entities belonging to Mr Carter and connected to IT in one way or another. Among them were a marketplace, an outsourcing company, an advertising platform, and an AI start-up. Green Acres, a company based in a rural region, which developed an inventory management solution for farmers, caught our attention.

The thing is, it had two owners in its history: George C. Parker and Parker G. Carter.


Weird, we thought, it looks much like the other name was just the first one shuffled around, but we lacked evidence or understanding of Mr. Carter's motivations. First, we decided to find out, which companies George C. Parker also held a stake in. And it wasn't long until we stumbled upon Brooklyn Bridge Inc.


The company developed a VR solution for bungee-jumping aficionados who wanted to try their favourite thing in historical locations.

Having checked the company's court history, we found three records related to its failure to repay loans worth $8 million in total. In 2016, our person of interest took the money of unsuspecting investors and disappeared with it. To cover up his involvement in the fraud, Mr. Carter just shuffled up the initials, turning into an inconspicuous Parker G. Carter. The picture was complete, but we still lacked evidence. 

And we didn't have to dig deep to find it. Parker G. Carter's phone number on the register of individual entrepreneurs was the same as indicated on the VR development company's website. We also dived into Mr. Carter's Instagram for additional proof, looking through all 300 pictures he had there. And there it was, a photo of him in the Green Acres' office.


Ultimately, by enlisting Molfar's services for a fraction of the money, the client managed to avoid blowing $50,000 by buying the Baker Estate.

Written by Artem Starosiek, CEO of Molfar

Molfar HackerNoon profile picture
by Molfar @molfar.Company competitive analysis, pre-due diligence. Personnel screening. Market research.
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