“The venture’s challenges go deeper than balance sheets. The company purchased MixedMartialArts.com for approximately $250,000 but subsequently shuttered its once-vibrant forum, a gathering place that in earlier years attracted UFC president Dana White, podcast host Joe Rogan, and numerous professional athletes. The closure scattered the community, with many regulars migrating to independent discussion boards. Both the main site and closed forum now sit largely abandoned.”
Well since they’re raising so aggressively they probably don’t have much revenue now. Typically you build out product first, build out user base second, build out revenue third. You don’t really raise when you’ve got good revenue going. Acquiring UG was part of building out their user base and they probably use those user counts to sell investors, but obviously those users aren’t there when they will go to build out their revenue. Investors often invest based off a valuation that’s a multiple of a user count. UG was just a cheap acquisition for them that got them a high user count to raise off of. They don’t care about generating revenue because they’ll all be rich before that from investor money they’ve siphoned off.
Legally? probably not, those users exist. Depends what they tell investors, fraud would be like if they included all our accounts in daily active user account metrics, which they wouldnt be because they’re all stale or suspended, but i fthey just say total users then that isnt fraud. It’s up to investors to push what make up those numbers.