Wouldn’t you know it, there is a venture capital twist on the Alberto Vilar story I mentioned earlier today. What was the intended use of the $5-million from a single investor that Vilar allegedly used as his “piggy-bank”?
According to the complaint … Mr. Vilar talked the investor into putting $5 million into a new Amerindo venture: a government-backed investment company designed to attract venture capital for small businesses.
Mr. Vilar promised a $1 million return each year, the complaint said. But the government denied Amerindo permission to run the fund, which Mr. Vilar lied to the investor about…
The fellow who wrote this story for the Times is the paper’s music reporter, so the above passage is unnecessarily cryptic about which government venture program we’re talking about here. I originally thought he was referring to an SBA-backed SBIC levered-dollar venture fund, but on re-reading the above it sounds like something else. Bizarre stuff.
[Update] The latest Bloomberg update on the story makes it clear that it must have been an SBIC venture fund that Vilar was trying to create. And the NY Post has the best headline on this erstwhile arts benefactor’s financial troubles: “BLIGHT AT THE OPERA“.