
VC firms can be liable if startups wrongly claim stimulus funds - dsavant
https://venturebeat.com/2020/05/03/vc-firms-can-be-liable-if-startups-wrongly-claim-stimulus-funds/
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jacquesm
(1) this is reaching, a lot of gates have to trip before that becomes even a
remote possibility and (2) that liability as a director was there anyway.

In short, if you're a VC _and_ you know about the company you are investing in
applying in bad faith for stimulus money _and_ you don't do anything about it
then you are _possibly_ liable.

Directors and officers of the company can be liable under certain
circumstances anyway, whether the _fund_ or the VC (management) firm is liable
is another matter entirely and the article does not address this, at a guess
this is only the case if the firm is mentioned as such a director.

In short: don't commit fraud, and if you are in an oversight role: act the
part.

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caseysoftware
And there appears to be some sort of safe harbor provision where if you were
granted funds you can return them by a certain date. One group I advise
projected things crashing, applied, the projected crash didn't occur, got
money (low 6 figures), and returned it within a few days.

They didn't do it in bad faith, they just had a bad model.. not like they'd
worked this one out before.

Regardless, it did force them to work out some information and answer some
questions they hadn't considered so it was a learning experience, just a time
consuming/stressful one.

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silverreads
Cool, but the whistleblower claiming 30% seems like a strange incentive.

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jacquesm
More often than not that's a meager payout for what tends to be a career
destroying move.

Very rarely do whistleblowers pick up real money, it has happened a couple of
times though.

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lifeisstillgood
Managing the stimulus money (in the US and everywhere else) is likely to
follow the same path everywhere - give it out as widely as possible, find that
one high profile dodgy case and prosecute loudly, and have an amnesty period
for companies to return money if they find they did not mean it.

This will work fine(ish) for the larger employers, but the majority of smaller
businesses are going to be hurting in ways that paying 80% of employees wages
won't help. Imagine a city bar / restaurant- in a few months they can reopen,
their landlord will now demand back rent, all their customers will only be
seated at tables 2 metres apart and they still won't cover costs.

The post covid landscape is going to look weird till we reach herd immunity /
vaccine. And a lot of businesses that will be viable post-immunity are simply
going to need to hibernate for much longer than a few months.

