Directors of the shuttered social-media startup IRL wrongfully rushed to close the business to protect their reputations in the venture capital community, the site’s co-founder contends in a lawsuit, Bloomberg News reported. IRL, or In Real Life, was shut down in June after a board probe found that robot accounts made up 95% of the platform’s customer base. The directors represented investing units of Softbank Group Corp. and others that had backed the startup, once valued at $1.1 billion, according to court filings. IRL co-founder and former Chief Executive Officer Abraham Shafi alleges in the lawsuit, filed yesterday in Delaware Chancery Court, that the directors had evidence contradicting a consulting firm’s findings about the site’s lack of human users. Shafi claims they lied about the reasons for closing the site to pin its collapse on him.
