Mike Rothenberg has been in a heap of trouble over a series of purportedly fraudulent transactions within his investment firm Rothenberg Ventures and his virtual reality startup River Studios. Now Transcend VR, as first reported in the Wall Street Journal, is suing the venture capitalist on allegations of fraud, breach of contract and deceptive diversion of funds.
Transcend, which filed the lawsuit in the California state superior court last week, says it invested $2 million as a convertible promissory note in Bend Reality LLC (i.e. River Studios) on the belief it was the first non-founder to invest and that Rothenberg held 100 percent equity in River.
However, Transcend says Rothenberg diverted $5 million over a two-year period from “another investment” into River Studios starting in 2014, giving those investors a beneficial ownership in the virtual reality startup. Transcend maintains it was never told of this previous investment.
We’ve reached out to Mike Rothenberg to…