We all know the risks associated with being an investor in a start-up company. The new venture may not have the right oversight to manage its projects, it may run out of money and need to raise additional investment funds, or it just may not be successful in executing the idea period. Unfortunately when it comes to Flictunes, LLC and its founder Blake Bechtel, all three risks have led to a lawsuit for breach of contract due to a failure by Flictunes to repay its debts.
Back in 2014 Blake Bechtel reached out to AJ Ventures seeking investment on a mobile application in development. This app was to act as a collaborative photo slideshow with music. Although Blake himself had made it clear he had already invested more than a quarter million dollars trying to launch the app a few years back, he claimed he only failed due to the lack of a development team. For a number of reasons, AJ Ventures was hesitant to provide a direct investment. Instead a deal was struck for AJ Ventures to loan Flictunes the $350,000 they sought in exchange for a modest interest fee and equity kicker. Now, two years after taking the investment from AJ Ventures, Flictunes still doesn’t have a finished product with over $500,000 invested in total and 5 years in the making. “I have never seen a simple app like this take this long or this much money to execute” exclaimed Hiruy Amanuel, AJ Ventures Managing Director. Now at the end of the loan term, Mr. Bechtel claims to not have the money to pay back this debt and is willing to walk away from the company and hand over its assets (which would appear to have little to no value at this point) to AJ Ventures in “satisfaction” of the repayment obligation. Amazing to believe that someone from one of Americas richest families would rather bankrupt one of his companies rather than to pay back a relatively small debt.