Did TechCrunchIT Co-Editor Nik Cubrilovic Rip Off His Omnidrive Investors?

The story of online storage startup Omnidrive is an intriguing one. Founded in 2004, Michael Arrington called it “online storage perfection.” The company seemed to be on its way. By 2007, it had actual customers and partnered with Zoho.

By this year, however, the company’s fate was uncertain. In May, one of Omnidrive’s investors, Clay Cook, published a blog post containing some disturbing information. He reported that Omnidrive had not paid employees and was lying to them about the company’s situation, that a substantial amount of money was owed to investors and other parties and that Omnidrive founder Nik Cubrilovic had basically gone missing in action.

ReadWriteWeb placed Omnidrive in the deadpool. Cubrilovic resurfaced and claimed that all was fine. ReadWriteWeb covered the entire story.

Flash forward to October. Omnidrive’s domain points to a company called Amnesty Financial Plus, which offers cash advances to those in need of money (Silicon Valley’s newly unemployed?). And Cook published another blog post with an update on his saga:

As of a few weeks ago it appears as though Omnidrive no longer exists and Nik is nowhere to be found.

As the major investor in Omnidrive I am stunned not to have received any information from Nik on what’s been happening over the last few months. I have emailed him a number of times, but have not had a single reply. The last I heard he was flying around the world, after launching Techcrunch IT, and also building the Techcrunch tablet for Michael Arrington.

Quick run down…

1. The Omnidrive domain seems to have been sold (?) to Amnesty Financial Plus.
2. Not sure what (if anything) has happened to the Omnidrive IP. Did Nik also sell the IP?
3. There is a long list of creditors left behind.
4. No word from Nik to investors or customers.

God it sounds like I am bitching, oh well, there goes USD$100k, so be it.

Short version: Cubrilovic has apparently fucked over Cook, Omnidrive’s other investors and Omnidrive’s customers.

As it stands, Cook’s money is gone, he has no idea what actually happened to the company he invested in and Cubrilovic, based on his silence, doesn’t seem to give a shit.

Enter Michael Arrington. Arrington likes drama and he loves a sordid story.

For instance, earlier this year he “exposed” Infospace founder Naveen Jain’s “latest scam.” He argued that a survey offered by Intelius, Jain’s newest company, “is what’s driving most or all of Intelius’ revenue growth.” Arrington called out the entities involved with Intelius’ pending IPO and lambasted them, telling them that they “have a responsibility to conduct due diligence and ferret this kind of stuff out.”

Principled guy, no?

And that’s where the saga of Nik Cubrilovic and Omnidrive gets interesting.

TechCrunch has covered Omnidrive in the past (8 posts are associated with the company) and as noted, Arrington himself called Omnidrive “online storage perfection.” As such, one might expect Arrington to be intrigued by the unfortunate turn of events at the company and the allegations of wrongdoing on the part of its founder. And he might logically want to bring them to the attention of his readers.

But Arrington has not only ignored the juicy story of a startup founder who apparently ripped off his investors, he has ignored Omnidrive’s descent into the deadpool altogether.

Why?

Cubrilovic works for TechCrunch. Although he hasn’t apparently posted for a while, he’s still listed as “co-editor” of TechCrunch IT. But it doesn’t end there. Arrington is an Omnidrive investor according to his disclosures.

Pretend for a moment that you’re Arrington (I know, it’s a tough thing to ask for, but just humor me).

The website of a startup that you’ve covered numerous times in the past has disappeared, its domain name points to another company, its investors have been left in the dark, its creditors are unpaid and a founder who appears to have just walked away from it all without fulfilling his fiduciary duties to anyone has not a word to say. Adding intrigue, his personal blog is dead and he hasn’t been active on Twitter, Flickr and FriendFeed for months.

Are you going to report on this juicy tale or are you going to let everyone know about Britney Spears’ new Twitter account?

I’ve discussed Arrington’s lack of journalistic ethics in the past (as have others) and if there was still any debate over this subject, it’s settled here.

By refusing to even acknowledge that Omnidrive is dead and by refusing to cover the sordid tale that exists with a startup he previously covered, Arrington has chosen to put his interests as Cubrilovic’s employer and as an Omnidrive investor before his interests as TechCrunch’s editorial czar.

Obviously, the story of a startup that went under while its founder disappears into the night likely makes TechCrunch as one of Arrington’s late-night insomniac posts, provided, of course, that the alleged scamster doesn’t work for TechCrunch and that Arrington isn’t one of the company’s investors.

The question I want an answer to: what happened to the money Arrington put into Omnidrive? Did Arrington get any of it back? Did he get screwed? Did he ever seek a resolution with Omnidrive’s other investors (Cook included)?

The fact that Cubrilovic is still listed as a TechCrunch IT “co-editor” is bizarre if we make the assumption that Arrington, like Cook, must have lost his investment. Frankly, I’d feel quite odd employing a guy who , in the case that Cubrilovic is no longer working for TechCrunch, I’d have taken him off my “About” page immediately if I was Arrington.

Then again, maybe it doesn’t matter. Arrington’s investment track record as an angel investor isn’t all that impressive and he’s used to losing money. Edgeio and Omnidrive are gone. DanceJam, Seesmic and Daylife don’t look so promising. That leaves Dogster, which ironically might be the only investment in Arrington’s portfolio that isn’t a dog (it’s apparently profitable but looks to be, in my opinion, a nice small company – not a home run exit).

Perhaps Arrington’s investments in startups doomed to failure were his way of ensuring that he’d be able to get rid of his conflicts of interest. After all, when Edgeio failed, he stated that he walked away with nothing and proclaimed “my financial conflict of interest with this company is essentially over.”

I guess that’s one way of dealing with these situations.

To be fair to Cubrilovic, shit happens. The best laid plans go to hell. There’s nothing to be ashamed of when your business goes under and you handle its failure in an honest fashion. That includes doing your best to make your shareholders and stakeholders whole or, at the very least, telling them what happened. Cubrilovic, however, should be ashamed that he has left Cook hanging and by Cook’s account, left others hanging as well.

Given that, I hope Nik Cubrilovic traded in his reputation for something worthwhile and that he’s sitting on an island somewhere drinking a mojito. And I hope that the investors he seems to have hoodwinked are a lot more forgiving and lot less vengeful than I. All of my investments are “collateralized,” even if the recipients don’t know it.

As Tony Montana said in the movie Scarface, “All I have in this world is my balls and my word and I don’t break them for no one.”

Clearly Cubrilovic has no balls and his word has less value than GM stock. As such, for his sake, I hope Cubrilovic never finds himself dealing with individuals who cut testicles and tongues when they get screwed.