Filing: College app Fizz accuses VC of sharing confidential startup information with rival Sidechat

A lengthy legal battle between Fizz, a social app catering to college students, and its competitor Sidechat has taken a dramatic turn. In a recent court filing, Fizz alleges that Jerry Lu, an investor from the venture capital firm Maveron, misused his access to confidential information under the pretense of exploring a potential investment. Fizz claims that Lu subsequently shared sensitive business details with Sidechat, raising serious concerns regarding the ethical responsibilities of venture capitalists in competitive startup environments. Both Fizz and Sidechat operate in the same niche, providing anonymous online platforms where college students can engage and share gossip. This intense competition for user engagement has led some universities, such as those in the UNC system, to ban these applications due to issues related to bullying and inappropriate behavior. Fizz originally filed a lawsuit against Sidechat in 2023, accusing them of various unfair practices, including attempts to sabotage Fizz’s launches at college campuses and spreading misinformation about security breaches. Initially, Lu was not named in the lawsuit, as his involvement only came to light during the discovery phase of the legal proceedings. The complaint claims that Lu acted as a channel for transmitting Fizz’s confidential details to Sidechat’s parent company, Flower Ave Inc. Evidence presented in the filing includes a screenshot of a text message in which Lu allegedly shared notes after a meeting with Fizz in March 2022. During that meeting, Fizz founders disclosed critical information about their business strategy, fundraising efforts, and other proprietary data. According to Pitchbook data, Lu later invested in Sidechat’s second seed funding round in October 2023, although Fizz asserts that discussions between Lu and Sidechat began back in 2022. Furthermore, Fizz claims that Jack Burlinson, a mutual acquaintance of the founders and Lu, shared confidential documents with Lu, who then passed this information to Sidechat. Requests for comments from Lu and Maveron went unanswered, and Fizz chose not to comment on the ongoing case. In response, Kyle Venn, CEO of both Yik Yak and Sidechat, stated that these are merely allegations and emphasized the team's focus on product development rather than legal disputes.