Social sports start-up Sport195 sued by former employees for $500,000

New York based social media sports start-up Sport195 is being sued for almost $500,000 by 38 former employees with regards to unpaid wages and accumulated expenses. The former employees have filed court actions against Co-Founders Rob Petty (CEO) and Kevin Williams (CTO), claiming that they were deceived with regards to their wages, health insurance and pay.

Aaron Gordon journalist for Vice Sports broke the news of trouble at Sport195, detailing in an article the financial difficulties that the start-up and its management were facing.

Founded in September 2009 Sport195 aims to create a social sports platform for fans, athletes, organisations and businesses in order to connect and engage its users through the medium of sports. Sport195 would commercialise its services by allowing businesses and sports teams to create sub-site webpages which pulled relevant sports content from RSS feeds for $20,000 per month.

Vice sports reports that the start-up had raised millions dollars (undisclosed sum) in seed/VC funding and had grown its operational and development team to 500 staff as the company tried to crack the lucrative US sports market.

However throughout its existence Sport195 had failed to prove its revenue model and business strategy as its platform had garnered no customers, generated no revenues and created little user engagement.

The start-up had come into financial difficulties in Q3 of 2014, when the company had limited working capital to pay its staff. CEO and Co-Founder Rob Petty had told staff that the company was awaiting to complete a $6.5 million investment which would see them through the difficult period.

Staff members continued to work for Sport195 under the pretence that they would be paid and rewarded once the funding was cleared. However as months passed without any pay, employees would begin to question Petty and his investment claims.

The former employees of Sport195 claim that Petty and Co-founder had been negligent and withdrawn the truths regarding the company’s financial state and operations