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Just months before he shut down his former startup Springleap, SA entrepreneur Eran Eyal who faces fraud charges in the US, appears to have sent LinkedIn messages to numerous investors saying the startup is “closing its seed round soon” and asking for investment contributions.
A top Cape Town entrepreneur, who asked to remain unnamed, today sent Ventureburn screenshots of two messages he said Eyal (pictured above) had sent to an investor just months before he listed himself on Linkedin as leaving Springleap — at the beginning of 2016 (see below screenshot of Eyal’s LinkedIn profile taken today).
A former colleague in Springleap, Trevor Wolfe, last week confirmed to Ventureburn that “a decision was taken by Eyal and investors” to shut the company in 2016.
It is unclear at this time, but Ventureburn understands that there was a US entity controlled by Eyal. It is unclear whether it was just the South African entity shut in 2016, or whether Eyal closed or stopped trading through the US entity as well.
The entrepreneur said the messages were sent to a “prominent angel investor” that he knew personally and who disclosed the messages to him. He said the investor operates in several markets globally, including South Africa.
The LinkedIn messages were sent by former Springleap founder Eran Eyal to a “prominent angel investor” requesting funding for the startup just months before Eyal shut it down
The first message was sent on 24 September 2015 (see below screenshot) while Eral lists January 2016 on his LinkedIn profile as the last month he was involved in Springleap.
In the first message (see below) Eyal writes that Springleap’s marketplace “has grown to over 180 000 ad agency experts, with an 80% acquisition rate and 97% retention rate”.
He then goes on to say that monthly revenue has grown “over 250% since December and we’re hitting $100k in October in booked and invoiced revenue”.
Commenting on the messages, the SA entrepreneur who asked not to be named points out that he doesn’t believe the investor commitments were real, and that it is “obvious that retention rate is pure nonsense”.
In a subsequent message (see below image), Eyal again asks the investor whether there are any other investors he can refer him to.
Eyal was charged on 24 August with allegedly stealing $600,000 from investors by fraudulently soliciting investors to purchase convertible notes through false representations of his company, Springleap. If convicted of the top count charged, he faces up to 15 years in prison.
Eyal has yet to make a statement or respond to questions from Ventureburn.
According to charges, between 2014 and 2015, Eyal allegedly attracted investors to Springleap through a series of false representations about Springleaps’s management team, advisory board, creative professionals and client base. The US District Attorney emphasised in her statement last month that Eyal is innocent until proven guilty.
Shopin, the US startup founded by Eyal has since removed the former Springleap founder from his position as CEO of the US company and replaced him with an interim head (see this story).
This is a developing story.
Read more: Springleap’s Eran Eyal removed as CEO of Shopin and replaced with interim head [Updated]
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Read more: Charges against Springleap founder not first time Eran Eyal’s in trouble with law [Updated]
Read more: Investor gatvol over losing R8.5m to Springleap through ‘misrepresentation’
Read more: Springleap charges: Are claims as world’s 7th most innovative firm a fabrication? [Updated]
Read more: SA entrepreneur Eran Eyal charged with fraud in the US over startup Springleap
Read more: Springleap’s Trevor Wolfe talks agencies, startups, and pivots [Q&A]
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Featured image: Former Springleap founder Eran Eyal (via Facebook)
Editor’s note (5 September 2018): This story was updated to include a screenshot of Eran Eyal’s LinkedIn profile showing that he left the company in January 2016 and confirmation from a former colleague at Springleap, Trevor Wolfe, that a decision was taken by Eyal and investors in 2016 to shut the company.
Editor’s note (6 September 2018): While Eyal listed himself on Linkedin as leaving Springleap in January 2016, it is not as yet clear whether he shut the company or not.
Ventureburn understands that there was a US entity controlled by Eyal. It is unclear whether it was just the South African entity shut in 2016, or whether Eyal closed or stopped trading through the US entity as well.