Complaint Review: CityGuru - Seattle Washington

Let the CityGuru, Inc. Investor/Lender/Joint Venture partner beware! 

If prospective Investors will take a peek behind the Curtain of the Wizard of Oz, they will see that the Seattle startup company, CityGuru, Inc. fails to meet the standards of a sound or prudent investment.  Based upon our due diligence research we found CityGuru, Inc. and Founder, Drew Morrison of Seattle to be an EXTREMELY risky investment!

CityGuru and Founder, Drew Morrison, first caught our attention as Investors when the startup company was nominated as Best Investment Opportunity and the People’s Choice award by Seattle’s ZINO Society.   ZINO’s panel of business experts were obviously impressed with Morrison’s pitch in behalf of his company.  With such an endorsement, how could we--as Investors--go wrong?

Fortunately, we are sophisticated investors who know the value of conducting due diligence research on prospective investments.  Unlike the ZINO Society judges who were blindsided by the upside of the investment opportunity, we place the emphasis on determining the true RISK of making that same investment.  So, perhaps should you.      

Our analysis is simple and methodical but based upon facts pertinent to safe and sound investing that match our investing objectives.   Naturally, we put CityGuru to the acid test of our analysis to determine and assess RISK.   That was accomplished by using our XpoZ™ analysis model combined with specific criteria such as company/public records, Company Officer/employee/ third party interviews, financial ratios and old-fashioned gut instinct based upon hard experience.    

The analysis assigns degrees of RISK by assigning points to each criterion.  The higher the number; the higher the RISK.  Below is our score card for CityGuru, Inc. and its Management. 

How we arrived at our Risk Assessment for CityGuru, Inc. and Founder, Drew Morrison:

ACCOUNTING:  We are impressed with a good pitch but we expect all numbers to be substantiated.  If a startup company cannot measure their numbers, then they can’t substantiate them.  Regadless how sophisticated the accounting system a company uses, it is the best means to substantiate company numbers and claims.  At a minimum, we expect a company to provide a Profit/Loss Statement, Balance Sheet and Income Statement, all based upon accounting records.   With these we can determine how much “skin” the Founder/Team has in the company, its Cap table, its Debt-to-Revenue ratio, and its burn rate/runway, or how quickly the startup company is expending its funding.  Founder, Drew Morrison, says his accountant keeps the books but was unable/unwilling to provide evidence of accounting to substantiate his numbers.  This flags us with concerns if CityGuru has any sort of accounting at all and if lines might be blurred between the Founder’s personal finances and that of the company. Without substantiation of an accounting system, we can score CityGuru with no less than 4 RISK points.

MANAGEMENT/COMPANY TEAM:  As any Investor knows: it is not the product or service you are really investing in—but the Management Team.  Understanding how well the Founder/Team work together, how their strengths/weaknesses complement one another and what expertise they bring to the table is all important to us.   In past media representations, CityGuru is led by Drew Morrison, Founder, T. Olin Nichols, CFO and two former CEO’s, James A. Billmaier and Tom Van Horn.  They are supported by technical/sales/marketing experts and at least three advisors.  In total the Team seems to be well suited for the startup company, ranking them as a Moderate Risk, or 2 RISK Points.   However, due diligence reveals the Team now seems highly fragmented at best and non-existent at worse.  Advisors and employees seemed reluctant to speak openly and Officer, James Billmaier outright denies ever being CEO to CityGuru!   This is enough for our assessment, leaving us to assume Founder, Drew Morrison, is leading the CityGuru charge with a dwindling number of followers.  With this limited talent base, we raised our RISKL Points from 2 to 3.    

INTELLECTUAL PROPERTY:  As Investors, we are keenly concerned with how well CityGuru may have locked down their own Intellectual Property. This includes agreements, such as Non-disclosures and terms with employees, contractors, vendors and partners.  Formerly doing business as “On The Go Technologies, LLC”, CityGuru often touted the merits of their “concierge” technology application in the travel/hospitality industry.  As we drilled deeper into this technology, more questions surfaced over what and how this technology is interrelated between On The Go Technologies and CityGuru.   Somehow there is a disconnect created by a shift in the type of service being provided by CityGuru vice On The Go Technologies.  The company was not forthcoming in our  inquiries about their IP or divergence between the two entities.   We can only assume there is no intellectual property and if so, that it is protected.  We scored the Company with 4 RISK Points.

REAL CUSTOMERS WE CAN SPEAK TO?:  Questions regarding CityGuru technology led us to speak with customers who may have used the technology when the company was known as On The Go Technologies:  hotel concierges.   However, these are not paying customers so their information was weighted accordingly.  CityGuru customers appear to be monthly subscribers to a service unlike that provided to the hotel conceirges.  Interviews with retail customers indicate a reasonable satisfaction for the services being rendered, but did not offer us a solid enough gauge on CityGuru’s customers or marketplace.  From experience, we assume the marketing of the startup can be refined and more highly focused.  We scored CityGuru with 2 RISK Points.  

FUNDING DOCUMENTATION:  .   According to a Form D, filed with the SEC, CityGuru, Inc. raised $80,000 of its target $100,000 under the leadership of Drew Morrison, James Billmaier (note: title listed as CEO) and Olin Nichols.  The funding was raised from four investors using debt instruments.  Understanding the terms, players,and deal structure of previous funding rounds in a startup company is vital to a prospective investor. It also provides valuable insight as if, how and when a company will honor its debt to investors.   Oddly, Morrison is not forthcoming in the details or documentation for this funding round, but we have surmised it may have been obtained from internal sources such as the Founder/Team, a positive indication the Team has “skin in the game” and alleviates the risk factor. We were unable to verify but in interviews, two former employees indicated they had invested money of their own—money they don’t expect to be repaid.  Without detail and documentation of this funding round we can only assess CityGuru at 3 RISK Points.      

GENERAL & ADMINISTRATIVE:   Even for a small startup, the facts of business life is record keeping.   Without it, a company cannot maintain its transparency to investors and we use it as a measure of a company and its founder’s financial, fiscal and fiduciary responsibility.   Even if record keeping is maintained through the services of an accountant as indicated by Morrison for CityGuru, those records are only as good as is the accessibility and accuracy of those records.  In court filings, Morrison has indicated that his financial/banking records were “unintentionally destroyed or lost” a statement that makes us wary since he was the fidicuary for hundreds of thousands of dollars of previous investors’ money.   A comment from a former CityGuru Team member may offer insight as to why Morrison would have filed such an eye-brow raising comment with the suggestion that perhaps Morrison was cautious with his record-keeping due to existing litigations and collectors…litigations and collectors…???  Our due diligence is beginning to reveal CityGuru may be operating without any real accounting system or with a viable G&A function as its Founder battles legal woes. To us, this is akin to sailing a ship across an unknown ocean without a compass or charts  with a captain at the helm who is fleeing the Royal Navy in hot pursuit.   We scored CityGuru with a full 4 RISK Points.    

HISTORY OF CITYGURU, INC.; History of a startup company and that of its Founder and Team is the “resume” of that company.  Like a resume for employment, gaps in time frames and unexplained dead-ends raise more questions.  And for us, many gaping holes and discrepancies exist in Morrison’s history up to his founding of CityGuru.  The historical trail on CityGuru is vague at best.  Even the “group” of investors from a previous Arizona venture leading up to the seeding of CityGuru seem to have evaporated and for reasons unknown.  The Founder, Drew Morrison, seems to place little or no relevance of his past ventures, partners and investors to his CityGuru venture nor forthcoming in this information helping us to better assess his experience and background.  Morrison also failed to be forthright with us and make important disclosures as mentioned below, knowing surely they would surface during due diligence.  We decided to look at other resumes and gave CityGuru 4 RISK Points.

LIABILITIES:  Savvy investors want to know the full scope of any and all liabilities they are funding.  While our initial focus was on any debt incurred/being incurred by CityGuru, interviews and public records began to reveal very significant liabilities in the form of active lawsuits and litigations against the Founder, Drew Morrison with the company, CityGuru being implicated as well.  Typically, our method of due diligence requires equal time be given to Plaintiffs in active lawsuits to better assess the scope of the litigation as a risk to our investment funds.   In this case, the Plaintiffs could not be contacted for comment but due to the scope of allegations described in Public records, we know enough to know allegations made against Morrison and CityGuru are significant enough to easily sweep up an unwary investor making Morrison’s issues potential issues to the investor.  (See Report # 1147031, www.ripoffreport.com).   Until Morrison resolves his legal woes, we are scoring CityGuru with 4 RISK Points.  

ROI PROBABILITY:  Our final and most important criterion is in our calculated risk to the probability of a worthwhile Return on Investment (ROI).  This includes factoring in certain measures that might be required to mitigate the other criteria discovered in the due diligence.  This might involve extended cash infusion, re-organizing the company or taking over the management reins of the company, whatever it takes to restore the company to functioning (and profitable) health.  CityGuru is certainly not the same company pitched to the ZINO SOCIETY, wowing their panel of expert judges.  It will require a corporate infrastructural overhaul, resolve of litigation woes and new leadership, far more than what we are willing to risk.  The best we can score CityGuru is 3 RISK Points.    

Note:  Conducting your own due diligence on CityGuru, Inc?  We freely share information and references upon request.  Never open your wallet without performing due diligence first—even should the investment be endorsed by the ZINO Society of Seattle!