Ty Haney, the Boulder businesswoman behind the athletic apparel startup Outdoor Voices, is being accused of defrauding local investors in her energy drink brand after they injected $3 million into the fledgling company and reportedly saved it from insolvency.
Haney, 37, launched Outdoor Voices in 2013. A startup darling, it raised $57 million and was valued at $110 million in 2018. Then it imploded, forcing Haney out in 2020 and closing all 16 of its stores. A venture capital firm bought it last year and brought Haney back.
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“Haney then approached and met with Dustin Simantob of Sinco Inc. to help raise the additional capital needed to complete the Target order and to keep Joggy afloat,” the Oct. 14 lawsuit states. “Haney communicated that Joggy needed $100,000 to fulfill the Target order.”
Sinco, a Boulder-based investment firm, is best known for buying an abandoned elementary school in the 1970s and turning it into the Highland City Club, an exclusive business and social club. Sinco’s CEO is Sina Simantob, an outspoken entrepreneur and Dustin’s father.
Sina Simantob says he met with Haney in January and agreed to make “an emergency investment in the fledgling company to help save it,” including by adding product lines. In exchange, Sinco was to receive a 20% stake in the company. Haney would keep 50% of Joggy, other investors would receive 20%, and 10% would be set aside for employees.
Their agreement was verbal at first and then, in late February, reduced to a term sheet that was nonbinding, Simantob acknowledges in the lawsuit that he and others filed last week.
The businessman says he effectively ran Joggy in the first half of this year, raising $3 million in funding; fulfilling the Target order; hiring a chief operating officer and, when Haney objected to that person, hiring a second; collecting $400,000 in accounts payable; and settling disputes.
“Sinco invested heavily based upon Haney’s false representations and false promises that Sinco would share in Joggy’s future success,” according to the lawsuit, which recalls Simantob telling a business associate on April 24 that his goal was to see Joggy turn into a billion-dollar company within the next five years and that he was “living and breathing Joggy.”
On June 4, Simantob texted Haney a proposal for turning the nonbinding term sheet into a formal, written agreement. Haney texted back, “Beautiful,” according to the lawsuit.
However, “the next day, Haney emailed a lengthy document proposing to restructure Joggy’s agreement with Sinco and increase her percentage of ownership while significantly reducing Sinco’s … equity from 20% to 3%,” Sinco and Simantob allege in their complaint.
When Simantob suggested that he and others at least be allowed to recoup their investments, Haney allegedly rejected that idea as well. So the investors are suing her and Joggy for securities fraud, misrepresentation, unjust enrichment, breach of contract and more.
“Haney and Joggy intentionally or recklessly engaged in this fraudulent conduct in connection with the offer, sale or purchase of a security,” according to their lawsuit, filed in Boulder.
Haney did not answer BusinessDen’s emails requesting a response to those allegations.
The other investors are David Chamberlin of Boulder, who reportedly gave $200,000; Susan Routt of Boulder ($75,000); and a California company that contributed $50,000. Their lawyers are Rohn Robbins, Doug Stevens and Justin Miller at Caplan & Earnest in Boulder.
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