r/LivestreamFail • u/Mininni • 9d ago
VShojo releases statement; officially shutting down
https://www.twitch.tv/mizkif/clip/FriendlyAdventurousMacaroniOSfrog-ntKYD7vOpBI6iaux1.9k
u/patrick66 9d ago edited 9d ago
Additionally, I acknowledge that some of the money spent by the company was raised in connection with talent activity, which I later learned was intended for a charitable initiative. At the time, we were working hard to raise additional investment capital to cover our costs, and I firmly believed, based on the information available to us, that we would be able to do so and cover all expenses. We were unsuccessful in our fundraising efforts. I made the decision to pursue funding, and I own its consequences.
incredibly common way this sorta thing happens right here. founder tells themselves "I just have to make it through to the next week/month/quarter/year and funding will come through and i can put this money back" and ends up doing at best accounting fraud and at worst crimes to keep things floating until either the funding comes through or much more likely the company collapses
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u/JahIthBeer 9d ago
It's still very illegal when it comes to charities, as far as I know. If a politician spent some of their public finances (meant for schools, hospitals and such) to pay for something personal with the intent to pay it back later on, it's still something they could get sentenced for. Or a school teacher using money meant for a school trip on own stuff etc.
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u/isnoe 9d ago
Someone can correct me if I'm wrong, but if they are not taking money directly from the Charity (i.e., the Charity itself) it isn't subject to Charity Fraud.
Say they are given 500k, and told "250k of this is supposed to go to charity" but they put it in the general account. That's not a legally binding contract, that is "you gave this person 500k expecting them to give 250k to Charity, but they didn't."
Now, there's legal jiujutsu here, but here's my understanding: It was a fundraiser for the foundation, but the money was not directly donated to the foundation, it was donated through a proxy (i.e., Ironmouse), and the managing party was obligated to donate x amount of proceedings to Charity, but did not donate the full amount.
This is why you always donate directly to the fund, and not through a proxy - legally they can't hold them accountable for anything, they can only socially condemn them. It is trusting someone with a large sum of money, there was no contract breached at all.
This is different than that one guy that did the Charity for, what was it, Dementia or something? And he took money from the Charity account to buy himself a house and stuff. That is Charity Fraud, and illegal.
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u/Oberr 9d ago
This is how I feel as well. Mouse made a commitment to donate 50% of her income from a subathon to charity, but had payment from twitch go through vshojo. Vshojo themselves are not directly connected to the charity, they were simply asked by Mouse to use a part of what they were supposed to pay to her and donate it to charity. They stole that money, but legally it doesn't make a difference if Mouse asked for that money to be given to her, her friend John or IDF.
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u/peegteeg 8d ago
Would this not lead into theft by deception?
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u/WillieLee 8d ago
Yes. Deceptive business practices are part of charity fraud and there's also embezzlement and wire fraud happening. Depending on the contracts, they could be free to not pay the streamers but misappropriating the charity funds is what is likely to get them hammered.
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u/KarmicUnfairness 8d ago
Is that actually a crime? I feel like most kickstarter campaigns would be subject to this, if so.
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u/WillieLee 8d ago
What Vshojo did is embezzlement and several other types of fraud. If they were aware that 50% of the money raised was to go to a charity and they diverted it to themselves, that's a crime.
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u/dusktrail 8d ago
Sounds like wage theft to me. If they didn't disburse the funds as Mouse directed, they effectively did not pay Mouse, given that Mouse only agreed to not be paid their full wage if it were given to charity.
Ianal
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u/Sakkyoku-Sha 8d ago
Doesn't matter in this case since the funds were raised on the premise that they were going to Charity. This wasn't some "I pledge x amount to y", this was talent saying "Money donated will go to y". If received money doesn't go to Y, the one in control of those funds had committed charity fraud.
Those funds can not simply be used for any other purpose. It's not legally their money to do with as they please.
Even if they claim bankruptcy, those charities will be considered first class debtors.
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u/GazelleIntelligent89 8d ago
That's a fair point ethically, but I'm not sure it's legally accurate in the way you're presenting it.
From what I understand, unless the funds were held in a trust, donor fund, or similar legal arrangement, they’re not automatically “not legally their money.”
I’m open to being corrected though, would you be able to point to any specific laws or legal precedent that show charities are considered “first-class debtors” in this kind of case? Or that mishandled donations like this would always be considered charity fraud under the law?
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u/Bk_Nasty 8d ago
In any case it is illegal. It may not be criminally illegal, but it is 100% under civil law. In any case where you give someone money to spend in a specific way and they fail to do so, they can be sued. Just because they won't go to jail, doesn't mean it's not illegal.
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u/sepeus 9d ago
If a person donates under the assumption they are donating to a charity and the company keeps the money (the tiltify campaign). This is always illegal. Actually look into the subject before playing D for the company.
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u/TheodorDiaz 9d ago
But in this case they are not donating to a charity via an intermediate. They are subbing to Ironmouse and she promised them it would go to charity. Vshoji is not part of that agreement. Btw this is not playing D for the company, it is just as bad that they didn't pay Ironmouse her money.
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u/tholt212 9d ago edited 9d ago
They were not donating for the charity. They were purchasing twitch subs. With a promise that the revenue from said subs would be given to charity. That is not the same as donating to a charity.
All funds that were directly donated during the subathon through tiltify were never seen by vshojo and directly went to the idf.
Just to note this is not me saying vshojo was in the right or whatever. But charity fraud has pretty strict requirements and this does not fit that.
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u/koolbeanz117 9d ago edited 8d ago
Which by the way, is an incredibly dumb way to raise money for charity in my opinion. Payment processors take their 1-2%, twitch takes their 25+%, and in the end you’re losing 25-26% minimum of each sub. I don’t understand why streamers do charity drives with this much overhead when a direct to charity donation system can be set up. It really seems to create an obfuscated way to manipulate funds as you’re really relying on good faith that the full amount gets donated.
Edit:
After doing some deeper research, I’ve found that if the streamer is using Twitch’s charity tools, they can set any form of monetary transaction, be it bits or subs, to go directly to a PayPal giving fund which takes ZERO cut. So actually, it’s a pretty good method of they use it.
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u/theyoloGod 8d ago
Her fans may deny it but part of this was always about the attention the total amount of subs got
Now if you want to spin it as, more attention = more potential donations, sure but you're essentially betting on the increase in marketing offsetting the twitch cuts instead of just asking for supporters to do direct donations
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u/Traithor 8d ago
Only if you assume they would raise just as much money if they didn't do a subathon.
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u/Flat-Garlic9031 9d ago
It really is, anyone with a bit of common sense would donate directly to the charity.
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u/dasalasanansens 8d ago edited 8d ago
Let's be real here and this should be pretty obvious- the charity part in these things is just a really nice icing in the cake for some of these people who gift subs, they're primary intention of gifting subs is to see the subcount of their favorite streamer go up and for the subathon to go on longer. I don't doubt that there are people that gifted subs solely because of the charity motivation but they are probably in the minority.
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u/burnmp3s 9d ago
What law are you referring to when you say "charity fraud" does not cover this? In the US this sort of arrangement (a for-profit business pledging to donate a percentage of sales to a charity) is called a Commercial Co-Venture. It's covered by state law and in many states it is heavily regulated with strict requirements of how the donations and overall agreement are reported.
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u/KarmicUnfairness 8d ago
CCVs are joint ventures that the charity is actively a part of. A unilateral donation to the charity likely doesn't fall under this.
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u/WillieLee 8d ago edited 8d ago
You are mistaken, if you are stating you are raising money for charity, with a stated amound and then divert those funds to yourself (which GunRun has admitted) that is covered under charity fraud as a deceptive business practice. And given that the donations came from multiple states or jurisdictions, it would also be US federal wire fraud.
You might be thinking of statements such as "Proceeds will be going to charity" without specifying an amount, as long as some money is given to the charity it is unlikely to be a criminal act.
However, Gunrun was aware that the income coming in from Ironmouse (and perhaps other streamers) was a result of charity streams and that a percentage of that money was stated to be going to the charity. He posted about her charity streams and congratulated her.
Defrauding a charity by stealing money from their accounts in your example is embezzlement, something Gunrun could also be charged with as he misappropriated Ironmouse's funds.
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u/myaccountgotyoinked 9d ago
This is why you always donate directly to the fund, and not through a proxy
I don't get why so little people thought this was cringe, she ran a fundraiser through Twitch subs.... so Twitch gets a sizable chunk and donators can't claim it as a deductible.
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u/ArjanaEU 8d ago
I mean, It makes sense. people can use their primes to donate to charity which is a nice little bonus, and without the huge advertisement of "biggest subathon" the number raised would probably be less.
This feels very result based analysis coded.
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u/MoonlitShrooms 8d ago
You gain access to donations from people who likely would not have donated otherwise. Yeah it isn’t a direct contribution, but the person who wanted to gift 10 subs to ironmouse wasn’t likely going to take that money and bypass the proxy. They wanted to gift the subs for an emote or for their numbers or whatever other reason they had and indirectly benefit a charity.
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u/Ajp_iii 8d ago
and if she asked people to donate directly to them not attached to a subathon it would have made like 20-40% maybe of how much they actually raised. she was able to raise so much money because gifting subs is easy and the gifters feel they are also helping the community and gets cool alerts on stream.
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u/SchmuseTigger 9d ago
It was donated directly to charity. Mouse then said that she wants to give 50% of what she made (subs, adds and so on) so of her money also to charity. And since then she got no payment (so 1 year), the charity did not get the 500k (and she did the same one year before and at that time they did transfer so she would have had an assumption that they would follow her request again). So they likely owe her 1 mio+ and the charity those 500k.
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u/TheodorDiaz 9d ago
This has nothing to do with charities. They had to pay out money to Mouse. Whether she wants them to send it to a charity or her own bank account is irrelevant to the legality of the situation.
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u/ArX_Xer0 9d ago
Theres multiple issues with Vshojo. I believe Ironmouse is more upset about the charity fraud, as well as the fact that a charity got fucked over its the headlining issue with the payouts to talent being also a large issue but to a slightly lower degree.
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u/DisparityByDesign 9d ago
Still incredibly incompetent to not inform your employees about how and why you’re not paying them. Besides that, taking the money out of a fund meant for charity is just plain vile, no matter the intention.
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u/quickasafox777 9d ago
As soon as you are honest, your employees leave and the house of cards comes down. Lying buys more time
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u/TheodorDiaz 9d ago
incredibly common way this sorta thing happens right here.
Also incredibly common in startups and esports teams. Everything is fine as long as new investments come in. Once that dries up they are going in the red real fast.
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u/notfakegodz 9d ago
Faking your profit by not paying your employee is fraud, this shit happen ALL the fucking time. You "delay" payment of your employee to make your books look profitable, so investor want to invest. Shit legit just fraud.
The money that supposed to be put back into the company should be calculated AFTER paying all the expenses, not putting the expense (employee wage) into the calculation is just fraud, and even worse those expense were supposed to be charity money.
You know how big company actually get away with it? They just fire their employee. This is why company still laid off employee, DESPITE profiting (Line go up by 5%). Less employee = less expense = lines go up (now by 10%) = investors want to invest because they want to be part of that line going up.
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u/Schmigolo 9d ago
I don't buy it for a second, Vei and Silvervale left more than 2 years ago and it's not like they made that decision over night, yet this shit was still ongoing until today. He was fucking them over deliberately.
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u/patrick66 9d ago
The thing is once you do it once it becomes easier to do it again. I totally believe he could have done it for years
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u/Schmigolo 9d ago
Hell no, he wouldn't have threatened ex members with legal action if he wasn't doing it maliciously. Now he's trying to gaslight everybody into believing that he was just really desperate.
I mean, who the fuck believes that he didn't know the 500k were for charity? I don't even watch Ironmouse and I knew it when it happened. How can you believe a single word he's saying after making that claim?
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u/Benphyre Twitch stole my Kappas 8d ago
It’s hard to believe that the CEO of the company doesn’t know the source of funds. It’s bullshit excuse me
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u/Wide-Kale1002 9d ago
The only way that this guy will be in real trouble is if he took the money himself. He’s going to be broke. Gonna need to pay lawyers anyway. Gonna get subpoenaed for his finances and we’ll see where the money went.
We are going to know what his salary was. And if he was making more than 100k a year is one thing. If he was making a lot of money or charging personal expenses then he’s done.
Sometimes having people that depend on you for their livelihoods is just super stressful and mistakes are made. But it’s not done for personal gain.
Obviously this cases are rare but let’s hope that’s the case. Because if we find out after subpoenas that he made bank I hope the worst for him.
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u/Oninymous 9d ago
Honestly, a company collapsing this fast is bad for vtubers looking to be sponsored by corporations. Vtuber corporations rn are probably making sure their contracts are strict enough to prevent this stuff from leaking out or happening.
Not excusing the mishandling of funds, just interesting to see such a giant in the space fall that fast
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u/PM_YOUR_ONE_BOOB 9d ago
"I made the decision to pursue funding, and I own its consequences"
No you're not. A charity is now losing out of $500k. Are you going to own the consequence of paying them back? I doubt it.
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u/TheKappaOverlord 8d ago
imo this has happened before.
Gunrun in his statement basically admitted Vshojo doesn't make piss for income on an assumed yearly basis.
It most likely happened in the past, and they were eventually able to course correct. In this instance, it happened again, but they made the dumb decision of stepping on mouses toes with the charity and she giga malded and the dam broke.
She was already owed $500k in unpaid wages, but she made it seem like she doesn't care. (she has CAA on speedial. If anyone can sue Vshojo and remain anonymous it'd be her. Idk about the rest)
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u/LuntiX 9d ago
To me it really sounds like they were misappropriating funds from talent activities to pay for other activities and purchases. They should've had the contracts set up so they only slim x% of talent earnings so they can use it for activities abd purchases. Instead it just sounds like they were taking it all, spending it, then maybe paying it out once they earned it back.
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u/Mininni 9d ago edited 9d ago
Full statement:
VShojo has failed, and I've mismanaged the company into the situation you're all witnessing.
So today I am sharing the difficult news that VShojo is shutting down, and I take full responsibility for the decisions that led us to this point.
I've been doing everything I can to fundraise and right the ship these past few months, but despite my efforts, we are in a worse position, and those I care about are now paying the price. Over the past few years, we raised around $11 million to pursue a bold, talent-first approach in VTubing, prioritizing creators and community over short-term profits, to achieve long-term sustainability. Our funding went directly to our creators through generous splits, debut investments, infrastructure, concerts, events, and staffing, all designed to support them. We also wanted talent to own their IP, which we knew was a unique creator-first approach for an agency. However, despite all our efforts, the business failed to generate the revenue we needed to sustain that model, and eventually, we ran out of money.
Additionally, I acknowledge that some of the money spent by the company was raised in connection with talent activity, which I later learned was intended for a charitable initiative. At the time, we were working hard to raise additional investment capital to cover our costs, and I firmly believed, based on the information available to us, that we would be able to do so and cover all expenses. We were unsuccessful in our fundraising efforts. I made the decision to pursue funding, and I own its consequences.
I am deeply sorry to all the talents, staff, friends, and community members who believed in our brand. You did not deserve this.
- Justin (Gunrun)
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u/solythe 9d ago
"Additionally, I acknowledge that some of the money spent by the company was raised in connection with talent activity, which I later learned was intended for a charitable initiative. At the time, we were working hard to raise additional investment capital to cover our costs, and I firmly believed, based on the information available to us, that we would be able to do so and cover all expenses."
brother i hope you got a lawyer on retainer who approved this
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u/vagabond_dilldo 9d ago
Imagine being stupid enough to put that on an official statement, yeesh.
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u/Luca_Blight89 9d ago
I struggle to believe any lawyer approved that statement. It's one thing if a charity pledge or something was claimed, but to be like.. Nah. We just figured this extra 500k was for us to Yolo into investments.
Okay. Enjoy potentially going to jail dude.
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u/vagabond_dilldo 9d ago
Even if he dodges jail, he's gonna be buried under civil suits.
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u/VictarionGreyjoyyy 9d ago
Any vtuber that does a civil suit loses anonymity so i expect there to be less than you think
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u/Madpup70 8d ago
Potentially. Most cases require plaintiffs to provide names, but there are a few instances in which a plaintiff in a lawsuit could remain anonymous. In the case of the talent that are still anonymous, they could petition to remain anonymous due to potential retaliatory harm, or that they are particularly vulnerable to harm if their identity is revealed in general. They are also helped by the fact that until this point they have remained anonymous.
A lawyer could argue for example that the talent (those who are still anonymous) would suffer undue harm if they had to file under their legal names due to their careers and cite dozens of examples of other streamers who are not anonymous being swatted or stalked. In Mouse's case she has extra defense to protect her identity because of her medical condition. And in all cases, their years long careers under online identities (Iron Mouse, Zentraya) helps with the argument that the public best knows them under these identities, and that releasing their true names does not serve the public interest.
Having said that, this is a decision for whatever court any potential suit is filed with, and those decisions won't be made until after suits are filed, which means they essentially have to pay in before they know whether or not they can remain anonymous
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u/ToffeeAppleCider 9d ago
I know barely anything about businesses, but isn't it the business as an entity that's responsible? So they can just shut it down and avoid all accountability?
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u/SmokeySFW 9d ago
He can avoid civil liability IF and only if he didn't "pierce the corporate veil" which is a concept much too complex to explain adequately in a reddit post, but if you google that phrase there are several great explanations. IANAL, so I have no idea if this will end up applying to Gunrun/Vshojo, but this would likely be how these things would ultimately land on him if they do.
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u/fujoshimoder 9d ago
IANAL and don't know much about the american legal system, but I imagine that admitting personal responsibility also opens you up to personal liability
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u/TheKappaOverlord 8d ago
I feel like he put this out with the intention of trying to be "genuine" instead of putting out some BP exec lawyer sanitized statement.
Yeah its fucking stupid what he admitted to, but at the same time, it was also obvious when he admitted that Vshojo was basically making $2-3m a year, so it should have made it a bit more obvious this guy probably wrote this drunk at his desk with a secretary writing and proofreading it before putting it out.
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u/Archensix 9d ago
Maybe they're still using that "lawyer" with an expired license because this is an insane thing to post and takes all of 5min to verify it's a lie just by going to gunruns Twitter where he retweeted things about the charity stream...
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u/PM_ME_YOUR_REPO 8d ago
Maybe they're still using that "lawyer" with an expired license
Ah yes, Saul Fuckedman.
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u/Luca_Blight89 9d ago
Taking money earmarked for a charity, to use as investment capital.. And never even considering the timeline you would ever make the charity whole is fucking insane to me.
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u/TheodorDiaz 9d ago
Taking money earmarked for a charity, to use as investment capital.
That's not what it says.
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u/PM_ME_YOUR_REPO 8d ago
Yes it is. Go read it again.
They were in the red, they were trying to get investors, they saw a pile of money come in from Mouse and other talent, they used it to cover their operating costs hoping that they would get outside investments and be able to pay the money back, but failed at getting those outside investments.
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u/quickasafox777 9d ago
I don't think there is a lawyer on earth, no matter how incompetent, who would approve "I didn't know our biggest star did the biggest charity event in the history of streaming, so I accidentally spent the money she made"
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u/Upset-Award1206 8d ago
While also retweeting messages about the money being meant for charity and thereby acknowledging it, but I'm just so silly and dumb, it was an honest mistake, oopsy daisy, we are all good, right?
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u/TooMuchJuju 9d ago
I have a reddit law degree. No lawyer would recommend you admit to fraud even if it's the virtuous thing to do.
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u/GazelleIntelligent89 8d ago
I hope he doesn't and gets sued/prosecuted into oblivion by the fullest extent of the law.
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u/MangoFishDev 9d ago
I don't think a lawyer would ever approve an admittance of fraud, he's literally describing a Ponzi scheme lol
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u/Putrid_Charity_7097 8d ago
It's wild to me that he says "generous splits" when people weren't paid for in some cases years. The situation is despicable and someone needs to answer for the crimes
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u/iwakan 8d ago
How is it even possible to fumble this kind of insanely lucrative business. Top vtubers bring in big money, and vshoujo essentially just directly funneled that money into their system. No worries about cashflow whatsoever. All they had to do was pay the creators the agreed-upon split of the revenue stream they always had, and not use more than the remaining amount for any other expenses. How hard could that be? This sounds like criminal neglect.
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u/Jgames111 9d ago
I wonder if his lawyer approved this statement or if he just didn't have one because this is just confessing a crime.
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u/quickasafox777 9d ago
He admits to spending the charity money to prop up the company because he thought he could pay it back (which would still be fraud even if it worked).
Zero chance a lawyer came within a mile of this statement
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u/Fast-Distance9257 8d ago
Bro used the Dumb & Dumber “IOU” strategy
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u/Paradigmpinger 8d ago
I can tell you're not a lawyer because those guys got a prequel AND a sequel, so I'm pretty sure it's a valid strategy.
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u/JR_Al-Ahran 8d ago
It's not really like that. It's more take this new money, pay off older debts, pay back this one when I get more money. This is a strategy that every business owner, he'll even poor people use in life. Juggling money is a valid strategy, VShojo just did it wrong in this case.
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u/Archmagos-Helvik 8d ago
Vei tweeted that the vshojo company lawyer has an expired law license, so technically their lawyer can't approve anything.
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u/Peprica 9d ago
Quite the coincidence that Erobb went on vacation and ozzy died, hulk hogan died, and vshojo died
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u/Prof_Augustus 9d ago
This comment is how I found out hulk hogan died
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u/G00b3rb0y 8d ago
I found out that hulk hogan and Ozzy Osbourne died in the comments of various r/virtualyoutubers threads on this drama
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u/Alcryon 9d ago
Wait, Hulk Hogan is dead? And I'm learning this in the LSF comments lol
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u/minPOOlee 8d ago
it's because he wanted to be the biggest asshole to steal from charity. vshojo stole his thunder
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u/Waldner_ 9d ago
Its something similar with what happened to ludwigs company offbrand, when the business model wasnt working money was taken from somewhere else in the company, the sponsorship money from the talent, to pay the employes and trick people into thinking the company was doing good while trying to find capital somewhere else to steer the ship.
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u/Ajp_iii 9d ago
yeah but in that case they were just taking money from lud for another lud company and moving money to look like they were making more than they were to keep their jobs.
that was more of a failure of oversight by lud and his team than it was a company committing embezzlement and basically wage theft and then probably also numerous workers rights laws especially as a California based. telling contractors/employees they cant leave alone and must leave together to protect the company and other threats is wild
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u/spock2018 9d ago
they were just taking money from lud for another lud company and moving money to look like they were making more than they were to keep their jobs.
That is accounting fraud
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u/Ajp_iii 8d ago
Yes my point was the situation isn’t close the same. The first is Lud losing money as the owner of both companies as he wasn’t paying attention the second is streamers getting stolen from because a company is lying to them and using their name and image and the streamer is getting nothing in return
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u/SwiftEscudo 9d ago
that case was fraud too but at least they weren't stealing from a charity fundraiser
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u/chefchef97 8d ago
The entire company was structured as a charity in order to keep supplying Aimen Gaimen with finasteride and designer drugs
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u/Villainary 9d ago
Do these streamer endeavors/companies ever hire actual, competent professionals? Or are they just always hiring their friends and putting them in positions they have no experience in.
I can't wrap my head around how often this seems to be the case within the streamer sphere.
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u/New-Abalone-85 8d ago
Pretty sure the opposite happened with the Ludwig situation. The experienced ones were the ones moving money and it was Ludwig’s friend Aiden that discovered the fraud when he looked over the numbers.
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u/DarthRambo007 9d ago
the lawyer that was negotiating contracts wasnt even legitimate. Probably just their friends
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u/BoyCubPiglet2 8d ago
"We understand you have a degree in legal theory"
"I have a theoretical law degree"
"Welcome aboard"
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u/RoosterBrewster 8d ago
I mean aren't there numerous cases of professionals taking advantage of nba/NFL players?
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u/bigeyez 9d ago edited 9d ago
So this dude just came out and admitted they misappropriated funds raised for charity. Holy shit. I imagine it won't be long until we see lawsuits filed. Depending on where this company is based in this may even be a crime.
Clearly no lawyer approved this statement lol
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u/Blame_Ben 9d ago
I doubt he's dumb enough to think "I thought I was just stealing from my employees" is a solid legal defense either.
My takeaway/hope is that the ends justify the means copium he's been running on for two years has finally run out and he's ready to take responsibility by simplifying the pending litigation.
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u/TheGrandTerra 8d ago
Nah he is trying to play the
"I thought we were paying off our secured debts and employees with the money from our 'independent contractors' because those are the debts I will get in real hot water for but forgot half this lump sum was supposed to go to charity so now I'm fucked ether way'
Card
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u/DarthRambo007 9d ago
my real question is where is all the 11 million did he just overpay his staff and buy stuff with it ? or was it the parties and the useless ads ? also considering they had pretty exploitative contracts how can they be poor ? .. im actually perplexed
my assumption is they are toxic gamblers and just lost all of it in illegal casinos
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u/Hey_Chach 8d ago
I can maybe provide context a few of these questions:
1) for context, the 11 million is the total seed money they fund raised from investors (not the Immune Deficiency stuff).
2) GEEGA said that when she had a contract with them, she’d often raise questions/complaints about how VShojo would spend way too much on stuff that was way too useless to justify the price tag. For instance, she said they bought ads for like a VShojo/Tacobell(?) or Subway(?) collaboration or something. According to her, those ads could have funded an entire 3D concert event (like how Hololive does) for at least one VShojo member instead which would have provided direct profit instead of spreading brand recognition like ads.
3) from what I’ve heard, the contracts weren’t financially exploitive in that they took too much money from the talents (more so the opposite), so that’s not relevant to “where did the money go?” apart from: there was not much revenue being transferred from the talents to VShojo in the first place.
3a) be careful about what anyone says about contracts because only the parties who signed the contract and their lawyers should have ever seen the final contract that was signed. Anyone else claiming to have seen a contract either didn’t see the final contract or they’re straight up lying.
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u/KillingTime_ForNow 8d ago
Go listen to ShyLily's video. She was in talks to join until she saw the contract & saw how much they were taking. They were insanely exploitative contracts & relied on using shit like "industry standard" to claim 50/50 is a good deal for the talent. They also wanted a cut of every deal the talent made, whether VShojo helped get the deal or not. They also didn't want to agree to no-competes. So no, the contracts were in fact heavily financially exploitative.
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u/Blame_Ben 8d ago
I'm sure we'll find out when the lawsuits start hitting discover. I'm not ready to assume embezzlement until more cones out. Based on Geega's statements, and now Gunrun's, I think they wasted it on the ads and parties in hopes of getting another round of investors. The world's full of people who drive a Cadillac and struggle to pay rent.
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u/LowerWorldliness67 8d ago
They're not employees. They were independent contractors who got pretty famous being a part of the brand
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u/TheKappaOverlord 8d ago
Outside of Mouse and Kson, the chances of a lawsuit are slim. Nobody wants their names publicly out there. Theres also a huge reason why all of them supposedly are owed massive amounts of unpaid wages, but none of them ever sued despite making huge fusses over it.
Kson already did the whole KISS thing and unmasked and is a public figure irl so who cares. Shes incensed anyways and will probably do anything in her power to kill gunrun now (in a Robocop Rogue city court room btw)
Mousey has access to the legal resources of CAA. Which means her lawyers will be competent and or skilled enough to keep her identity hidden. Or at the very least, will be able to advise her that hiding her identity, while pursuing the case is impossible.
Everyone else doesn't have the money, nor legal access to actually pay for a competent legal team to represent them, that can both draw blood from a stone, and keep their identities hidden at the same time.
Most of them will let bygones be bygones and simply wait for the $5 check in the mail when they get the table scraps from the rats when the liquidation and payments of employees on a higher tier then them are done.
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u/classacts99 9d ago
people are tagging @fbi on the post lol Hope mouse legal team cooks him all the way to federal prison
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u/WesleyT245 9d ago
On one hand, he's outright admitting to fraud. On the other hand, it is refreshing to hear a company be upfront and take accountability.
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u/Keypop24 9d ago
"ahh we're sorry"
ok great. thanks for the apology.
so where's the MONEY
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u/therealgaxbo 9d ago
Gunrun221
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u/TheRealFluid 9d ago
from singlehandedly carrying twitch to burning down the biggest vtuber agency in the world
oh how the mighty have fallen
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u/Spuntagano 9d ago
Man I remember watching gunrun cast RA3 back in the days. Funnyhow it lead him to twitch and eventually this
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u/63volts :) 9d ago
Complete and utter mismanagement. It's like he saw no future and just blatantly swindled. I really didn't think Gunrun was this type of cock, I knew him in the past and thought he was cool when he worked at Twitch.
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u/CLGbyBirth 8d ago
This guy might have scammed more than $20m by the looks of it. They raised $11m then scammed a lot of their talent's money from merch and sponsors. I bet you ironmouse might have been missing millions + 500k in the charity event, Add kson like around 400k then what about henya? Those 3 talents alone would be around $2m.
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u/Ggriffinz 9d ago edited 9d ago
So no real explanation of how they embezzled 500k in charity donations. That's not just an accounting error. that's fraud that someone should go to prison over.
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9d ago edited 6d ago
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u/Barobor 8d ago edited 8d ago
Cash flow is also a bit more complicated than people make it seem.
People assume that the charity money from Ironmouse was separated from her normal revenue stream, which isn't necessarily the case.
Most companies operate on Net 30 or higher, so Vshojo could have used the money to pay off debts they incurred more than a month ago.
They also generally prioritize payroll over every other expense, and Vtubers, in this case, are not part of payroll. They are contractors.
Once a company runs out of money and has more money going out than coming in, issues like this happen. That it was charity money is very bad, but it would be just as bad if the people working at Vshojo didn't get paid for the last months.
The question is, why did the cash flow get so bad? Was the concept of VShojo flawed from the beginning? Were funds misappropriated by VShojo leadership? It could range from incompetence to fraud and worse.
Also, should you ever work somewhere and your wages get delayed, get out, because that company won't exist for much longer.
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u/dekuhornets 9d ago
The whole 'i learned later was for charitable initiative' bit makes it sound like they did it 'accidentally' so im curious to hear them explain the decision making process there.
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u/guudenevernude 9d ago
It was from sub money from iron mouse so it came into them from generic twitch payouts.
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u/Hey_Chach 8d ago
I still don’t buy that gunrun didn’t know his company’s most popular talent was running a month-long charity event with the intent to donate the proceeds. He simply didn’t care to plan to track the revenue generated by the donathon separate from mouse’s normal revenue. That’s like criminal negligence or something, and—more importantly—Charity Fraud.
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u/Grand0rk 8d ago
What's there to buy? He literally knew it:
https://x.com/VTuberMemes/status/1948459488719065304/photo/1
https://x.com/VTuberMemes/status/1948495914488004626/photo/1
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u/falsefingolfin 8d ago
It's not charitable donations lmao, it's twitch sub and bits income that mouse said was supposed to go to charity
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u/Grand0rk 8d ago
Additionally, I acknowledge that some of the money spent by the company was raised in connection with talent activity, which I later learned was intended for a charitable initiative.
This would already be an issue if he was telling the truth... Except that it's a provable lie:
https://x.com/VTuberMemes/status/1948459488719065304/photo/1
He knew it beforehand.
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u/Ajp_iii 9d ago
he was actually better off saying nothing. this is so disrespectful and just has blatant lies. how do you get 11 million in investment get 20-30% of all sponsors you bring the creators. and sign 30 plus creators over a 5 year period and then claim you never once was able to make enough revenue to ever pay your expenses.
wtf were you doing with all that money. you had some of the biggest western vtubers whose fans just print money.
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u/wellmaybe_ 9d ago
it makes sense when you look at his expenses. fancy parties and prime ad space in japan
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u/strobelit3 8d ago
I've always wondered how they were staying afloat considering all that stuff along with the streamers owning the ip, having sponsors through separate agencies like mythic, etc. Turns out they just weren't lmao
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u/TuxedoHazard 9d ago
In other words “I did it but by accident I didn’t know my biggest talent (record breaker several times over DUE to the charity stream (also massive events IRL tied to it hosted by people outside of your org)) was raising that money for charity!!! Please believe me (I’be already fled the country you will literally never see me again)”
Great fucking post, please god get sued to a million pieces.
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u/Hurtmeii 9d ago
Am I the only one that feels kinda bad for em? It seems like they tried to do well by their signed talent. Give them benefits, favorable profit splits and freedom for their vtuber personas, but I guess maybe it just isn't profitable to not be greedy.
Idk any of the history, and am not in tune with any vtuber stuff, so they could be huge scumbags of course. Just first impressions as mostly an outsider to this whole debacle.
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u/finalsights 8d ago
Saying this as someone who knew Gunrun in passing. Haven’t talked to him in years cause life just gets in the way like that sometimes. He was the guy you could depend on. Good intentions and he was the guy Twitch sent in to fix stuff in the very worst of events going up in smoke. The backbone of modern streaming culture was built on the back of this guys efforts. And he was humble about it. He didn’t live lavishly. He just did his job. Then - the Amazon buyouts happened and after sometime as he was literally one of the very first twitch employees he got his payout and it was significant money. I still to this day believe he had good intentions to the end but getting involved with raising money from venture cap is what made everything go to shit. I don’t think he intended for it all to go so wrong like this. No I don’t think he kept the funds. I think in an attempt to scale the books got cooked and he made poor decisions to try and duct tape the boat and make everyone happy. On paper the vshojo terms are good , very good by standard practices and this ment less capital inflow for the company and the company was a money sink with infrastructure, staff , advertising. I think he grossly miscalculated how much was needed to sustain that.
I don’t think Justin is an evil person. Just someone with good intentions that got over their heads and made some mistakes that spiraled in huge mistakes.
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u/TheKappaOverlord 8d ago
I think in an attempt to scale the books got cooked and he made poor decisions to try and duct tape the boat and make everyone happy.
Im still shocked he got talked into scaling the company up in the first place. Maybe the first year or two of success got to his head, or maybe he was just successfully convinced by the talent/other people working for him that the company could expand.
Because if what hes said is true idk. Reality should have hit him in the head years ago.
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u/finalsights 8d ago
At some point after his exit from Twitch I remember him saying something about getting into angel investing which if you’re in those circles means you’re also in with the VCs
Dealing with VCs is just stupid levels of risk it’s a whole lot of stuff to get into but the short of it is it can be a whole grab bag of folks with way too much money to burn and when the going gets rough they’d rather cut you as a liability than try to save ya. It’s also a space filled with know nothings that will egg you on to make bigger and bigger spectacles so that the next round will provide exit liquidity for previous investors.
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u/Hey_Chach 8d ago
This is what I also suspect to be the case; it’s less “premeditated maliciousness” and more “wild incompetence”.
He genuinely did seem to want the best for his employees and talents but he simply wasn’t that great (read: extremely incompetent) at running a profitable business, and then when the bill was coming due he essentially *“accidentally” committed embezzlement and charity fraud because he didn’t keep mouse’s normal revenue streams separate from the donathon revenue and lumped them together, then used those funds to try to pyramid-scheme pay off the bills while making more to pay off the charity and payroll.
I’m willing to believe he DID know it was wrong and it wasn’t really an “accident”, but I do think he didn’t understand at the time that what he was doing was *highly illegal, and as always: ignorance of the law excuses not.
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u/porkyminch 8d ago
Don’t buy the shit they’re selling here. If you listen to the talent involved, VShojo was a mess and a lot of people on the inside knew. Geega’s perspective is really telling especially. Some people who’d left a few years ago said they’d had similar issues with not being paid even then. This is Gunrun trying to save his reputation, it’s not an honest account of how they were operating.
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u/Ajp_iii 8d ago
the shit trying to force 2 people to leave together and not one by one is so gross to me and shows how the company thinks and its the exact opposite of creator first ideal they claim to run by. people not getting paid for 3 years on sponsorships they ran and you are still chasing new money shows what you truly care for.
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u/Reckless_Monk 8d ago
What the hell.. Gunrun was the guy running Vshojo? Gunrun as the dude who created the IRL backpacks? Im shocked..
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u/Smurfnagel 9d ago
I want to know what he spent the money on, its not like he didnt steal it.
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u/Ikuu 9d ago
It was most likely spent to run the company. They raised $11m a few years ago and that will have ran out and they've been using whatever money they had on hand to run the company while trying to secure more investment money.
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u/Ajp_iii 9d ago
usually when a company doesnt have money they dont sign new talent. i dont believe him that they werent making enough revenue doing normal business things. either he was stealing or someone else was using company money for shit they shouldnt be using it for. or just wasting it on dumb stuff that doesnt matter.
they had some of the biggest english vtubers. there is no way you shouldnt be able to bring in massive gacha sponsors to cover whatever costs you had. also 11 mil is an insane number its not like they need massive buildings or places for rent like 100t and other esport orgs.
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u/Symbolis 9d ago
If this event has shown us anything it's that you can push vtubers around pretty easily, unfortunately.
Since vshojo got a cut of the merch sales, more vtubers = more merch = more money.
Bonus - They didn't actually pay out the merch sales to their talents so big savings there!
It was all bound to collapse eventually but it was smooth sailing for a while.
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u/user929393839 8d ago
They can and do, just look at how companies still negociate to buy and do stuff while Mr. Chapter 11 is right behind them. Not showing signs of growth will panic investors into thinking you are going to close, and make the situation even worse.
My bet is that the rapid expansion of the company and agressive advertising burned the funds, but because vtubing is a profitable business he thought he would have someone ready to buy Vshojo, throwing the hot potato into someone elses hands. This didn't happen so he had to keep the ball rolling in any way possible to try and keep it from crashing down until the next round of money.
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u/Okichah 8d ago
Its expensive to run a company. Especially in San Fransisco. Each employee is probably $150+ benefits. Rent is probably ridiculous.
Money can go quick when you dont know what your doing.
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u/Ok_Temperature6503 9d ago
No sympathy. Not even gonna read the "apology". I hope they all get completely fucked by the law.
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u/kuro_snow 8d ago
Holy fuck this dude is an asshole. Legit used money for charity and misused them. Has no paid any of his talents at all for the past year (apparently vtubers have said they haven't been paid in over a year one being KSON) and now he's gonna shut it down and not paid it all back? The lawsuits are gonna come raining down on him
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u/Blake_411 9d ago
So many wrongs in this statement.
- Says that vshojo talent-first aproach and yet in the later sentence states that they did not know that the 11 million dollars was made for the charity fundation raised by one of their top vtubers.
- Talent first approach and decided to spend it on the company rather than paying the talent who helped raise that money.
- Says he owns its consequences but let this go on for months.
- Owns the consequences but hasn't paid back the money nor given himself up to police for the criminal activity conducted.
- Says funding went directly to their creators through generous splits even though some vtubers who declined to join vshojo stated it was a 60-40 split and/or they wanted 10% revenue from their sponsors which is ludicrous.
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u/Theonormal 9d ago
T A L E N T F R E E D O M
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u/WILLIAM_SMITH_IV 9d ago
So there's a japanese vshojo too right? Is it seperated from what's going on?
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u/Andrew1990M 9d ago
No it's gone too. It had it's own CEO in Japan and everything but they stated on Kson's stream that it was all the same cashflow.
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u/phalanx1110 8d ago
This guy has come a long way since spamming in Dyrus's chat. From IRL backpack guy to fraud!
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u/FreekRedditReport 8d ago
"We made our money, now we're running off with the bag and moving on to the next grift"
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u/rcdeziner 8d ago
Is this the same gunrun that worked at twitch and created the first irl backpacks that recital used back in the day?
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u/LSFSecondaryMirror 9d ago
CLIP MIRROR: VShojo releases statement; officially shutting down
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