Headspin Revenue Fabrication
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A story about fraudulent revenue reporting at a tech startup called Headspin.
"My buddy worked at Headspin after working at several high-profile tech companies. He told me about Headspin, saying it was going to be the next big thing. They had this interesting business - if you have a mobile app and want to test it on different phones worldwide, they had phones in data rooms globally that would run your app and report back performance data.
They showed in their investor deck that they had $100M of recurring revenue. It looked like it was clearly going to be a multibillion-dollar company. Fortunately, I didn't invest - I just got busy and forgot about it.
Later it came out that the CEO had literally made up the revenue numbers. He was just reporting false revenue and telling the bookkeepers in the company they were on a 'need to know' basis about what they could know. When they needed to raise money, he would just tell them what numbers to show.
The CEO was charged with fraud and the company went into disarray after the truth came out."
Shaan Puri
Host of MFM
Shaan Puri is the Chairman and Co-Founder of The Milk Road. He previously worked at Twitch as a Senior Director of Product, Mobile Gaming, and Emerging Markets. He also attended Duke University.