We've reached the moment of truth. The law in California, as I have described repeatedly (see In Fifty Days, Payments Innovation Will Stop In Silicon Valley and In Thirty Days, Payments Innovation Will Stop In Silicon Valley), has changed. Companies that hold money on behalf of others must meet certain tangible net worth and surety bond requirements that are essentially impossible to acheive without significant venture capital investment.

I've said basically all that there is to say on this topic. I think the law is poorly designed, and I think so because it affects me directly. This afternoon, the Deputy Commissioner of the California Department of Financial Institutions instructed me to shut down my company's FaceCash mobile payment system, because he does not believe that I am capable of raising the necessary capital in the next fifteen days. I haven't shut it down yet, but I've written the code to do it.

It's really a shame. I've already invested over a million dollars of my own money in FaceCash. The business model is clear: we make money on every transaction. The product works. It solves not one, not two, but closer to a hundred real problems that confront just about every small business owner in the country. It lowers interchange fees. It lowers fraud. It encourages loyalty. It improves transparency. It improves the operating efficiency of small businesses. It automates millions of hours of aggregated data entry. It makes reimbursement forms completely obsolete. It actually does your business taxes. It's cross-platform. It's handshake-agnostic. The list goes on and on.

This is not an incremental change we're talking about. FaceCash redefines the financial infrastructure, in a way that most bankers shudder to think about. It makes financial data easily accessible to those who need it, not obscured behind walls of fees and contracts. It's the kind of you-must-be-crazy innovation that Silicon Valley is known for—and yet we are clearly not in that Silicon Valley anymore.

Rather than invest in a productive, useful and frankly unprecedented product such as FaceCash, venture capital and angel investors have focused their time and billions of dollars of their money in companies and entrepreneurs that have, in serial fashion, deceived co-founders, deceived employees, and deceived customers. In many cases, shareholders are next. Meanwhile, they've left companies like my own for dead.

It's not the first time I've been left for dead, so I have some training in this department and I may yet survive. Or I may not. The message, however, should still send chills down any serious entrepreneur's spine. I am an educated person. I am a driven person. I am an honest person. I am an intelligent person. One thing I am not, however, is a fabulously wealthy person.

You shouldn't need to be fabulously wealthy to get funded. You also shouldn't need to lie. I've proven myself time and again in enormously difficult situations. Instead of receiving funding, today I received a threat that if I did not stop, I could be looking at criminal charges.

If you're an investor that I've spoken with, you should be asking yourself if you made the right choice. (There are, after all, still fifteen days left.)

If you're an investor that I have not spoken with, there are still fifteen days left.

If you're not an investor at all, then you should be thankful for that much. Then you should be asking yourself if you or your company could be next.