Something really, really bad went down at high flying startup Canopy Financial.

This is one of the high flying startups that had a lot of buzz the last couple of years. They’ve raised at least $85 million in venture capital with the help of an investment bank, Financial Technology Partners. Their most recent round, a reported $62.5 million, was funded by Spectrum Equity Investors.

Canopy debuted on the 2009 Inc. 500 List at #12 in terms of the fastest growing private companies in America.

In 2008 CEO Vikram Kashyap said his company had 2007 revenues of $9 million. More recently, we’ve heard, the company was saying they’d hit $60 million in revenue and $9 million or so in EBITDA.

All of this may have been lies.

Until recently all the venture capitalists involved proudly placed Canopy Financial on their portfolio pages. Now all trace of the company have been erased from the portfolio pages of investors GGV Capital, Spectrum Equity and Foundation Capital. And their investment bank has erased them from their trophy page as well. But here’s what these pages looked like very recently:

So what happened? Multiple sources have told us that Canopy was absolutely making up their financial statements, even forging audited statements with fake KMPG letterhead. And somehow the investment bank and all the investors never figured it out.

A call to KPMG before investing tens of millions of dollars would have been a good start, although I have the benefit of hindsight here.

Spectrum took the biggest hit, with their recent $62.5 million investment in the company. And we’re hearing that they’re now suing to try to recover some of that money. One of the early investors, GGVP, may have taken as much as $25 million of the recent round “off the table” from the Spectrum investment, and they’re now a defendant in the lawsuit, says one source.

Canopy’s website right now is a simple information page. All deep links are broken, and the old site has been taken down (we have a screenshot here from a few months ago).

We’ve reached out to just about everyone involved with the company for comment.

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Canopy Financial Accused Of Serious Financial Fraud, Investors Burned

For some time now, it has seemed like Foursquare was the only game in town. I mean “game” literally, as of the major location-based services, Foursquare seemed to be the only one really emphasizing gaming elements. But now Gowalla is starting to emphasize it more.

To be fair, Gowalla has had a sort of sub-game based around the dropping and picking up of items (basically, virtual goods) since the beginning. But in the latest build of its iPhone app which hit the App Store today, version 1.3, there are some new gaming aspects. The first is that items now have histories attached to them. This allows you to see who has had an item before you in a city. Looking over some of my items now, it’s actually pretty interesting to see that I know some people who have some of them before me.

While at first the idea behind including items in Gowalla didn’t make sense to me, after meeting with (Gowalla parent) Alamofire CEO Josh Williams, it makes a lot more sense. Aside from this history element, which is interesting, and that different items are of varying scarcities, there is also a plan in place to allow for the items you pick up to be exchanged in real life for actual goods, Williams says. He wasn’t ready to share any specifics just yet, but notes that there are already some interesting proposals on the table to do this. And Gowalla 1.3 is a “bit of a Trojan Horse right now,” for that, he says.

Obviously, the eventual idea behind this is that Gowalla could monetize these transactions. The core concept is similar to what Foursquare is doing with its Mayor Deals, but they too haven’t yet started to monetizing those. With location-based services still in their infancy, all of these services are simply focused on gaining users.

Williams also noted that Gowalla could eventually take a page from Alamofire’s first project, the Facebook app PackRat, and start selling certain items in Gowalla as virtual goods. Williams says they’re just thinking about the idea now, but with the iPhone’s new in-app purchases for free apps, it’s certainly possible.

And there’s another gaming element that Gowalla has added to the latest version of its iPhone app. Now, when you click on a venue, and click on the people tab for it, you can see a list of the top 10 people for that location. This is a list of the users who have checked into that venue the most amount of times over the past 90 days. In Foursquare terms, the top person would be the “mayor,” but again, this is a full top 10 list so more than just the top dog gets recognition.

Perhaps more importantly, with version 1.3, Gowalla has eased some of the GPS restrictions that curbed cheating but made it hard to check-in at certain indoor places. This should be much, much better, Williams tells us. The service is also hard at work on its native Android app, though they recently released a mobile web version that works with Android.

Gowalla is a free download in the App Store, find it here.

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Gowalla Ups Its Game And Hints At Future Business Models

We promised we’d start publishing some of the more entertaining emails we get in our inbox, in the probably ridiculous hope that publicly shaming people may actually lessen the flow of these absurd messages.

A couple of weeks ago we posted a harried email written by a reader looking for legal help (see No, Don’t Sue Facebook. Yes, Do Get A New Boyfriend).

Now we’ve got another one. Hachette Filipacchi Media, which publishes notable magazines like Elle, Car and Driver and Road & Track, wants a little help with their search engine rankings.

The company’s Digital Outreach Coordinator, Automotive Group sent us an email telling us how much they loved a recent CrunchGear post about Ford. They offered to “link to your site on our microblogs to improve your pagerank.”

Hey, great! We love links. But this link requires a little payback. They want us to link two pages on CarAndDriver.com to the anchor text “Ford Vehicle Buying Guide and/or Ford Flex Buying Guide.”

We get reciprocal link spam emails all the time (all sites do), but it’s rare for a large brand to engage in link farming so boldly. For that, we salute them (and we passed it on to Google’s Matt Cutts).

The full email is below, with the links as they suggest them. We’ve added nofollow tags, but since the email doesn’t specify that we can’t do this, we’ll expect our links back shortly.

From: [removed]@hfmus.com>
Date: November 18, 2009 4:18:11 PM EST
To: “‘tips@crunchgear.com’”
Subject: Question for Matt

Matt,

I read your article on Ford’s efforts to cut down on petroleum usage by using wheatgrass as an alternative in its third row storage container. This concept is extremely interesting and I would love to be able to either refer your post on one of my microblogs or link to your site on our microblogs to improve your pagerank.

What I would need from you is to place either in the article or really anywhere you think on your site that makes sense: Ford Vehicle Buying Guide and/or Ford Flex Buying Guide.

Let me know what you think!

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Email Of The Week: CarAndDriver Launches Bold Online Link Farm Strategy

Woot, the popular bargain site that offers one good (sometimes great) deal a day, has just launched a new portal at deals.Woot. The new site is a fairly major departure for Woot, which up until now has been driven by product selections from a team of Woot employees (aside from the main Woot.com site, which is often tech/geek focused, there are special subsites for shirts, wine, and a handful of others). Unlike these sites, Deals.Woot is run by its users — it’s essentially a Digg for bargains.

The new site features a list of top deals, as voted on by the community and chosen by the Deals.Woot algorithm. This will be going head to head against other deal sites like SlickDeals and FatWallet, which have well established communities. Woot already has plenty of fans, but it may take some time to build out a base of deal hunters.

But the very top of the site actually isn’t dictated by users. Instead, it’s dedicated to “Sponsored Deals”. Woot explains that these deals are paid for by advertisers, but that they’re still bargains:

OK, yes, companies pay a little something to be Sponsored Deals. But we don’t allow just any old crap in this section. Sponsored Deals are proposed to us by other retailers, manufacturers, and even other daily deal sites. If we find the deal compelling enough that our members will appreciate us bringing it to their attention, we’ll feature it here. Believe it or not, we have a reputation to uphold.

The site has been available for weeks before now, but was only available until members up until a few hours ago.

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Digg For Bargains: Deals.Woot Is Now Open To The Public

Knuckle Duster Corkscrew	iMo Pivot Touch unveiled	MUJI Lego kits make Lego an even more creative toy	LG rolls out first netbook in the US
Intouch IT7150 wireless Internet frame	USB Whirl Wind Warmer Cup	3D Rendering not difficult with ProFORMA	Hitachi Starboard FX-77GII Interactive Whiteboard
Extend and bend your minutes with the Stretch Clock	Illuminated JetBib Feeding System

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Gadget Thumbnails for 23-Nov-2009

This time they’re reconstructed the Declaration of Independence, complete with edits and comments from the founding fathers. My US History is a bit fuzzy, but there are plenty of obvious jokes nestled in here, and I’m sure the Googlers have included a few more subtle ones as well. Unfortunately, it looks like you’ll have to have a Wave account if you want to witness the creation of one of the United States’ most important documents. But we’ve tried to grab a few of the key moments in the screenshots below.

As a demonstration of what you can do with Wave, the document succeeds in some respects. But frankly it can still be confusing to tell what’s going on. For example, when the founding fathers are casting their votes, the Wave only says something vague like “Thomas Jefferson edited this message” — it’s up to you to figure out what he did.

According to a tweet a few minutes ago from Wave team member Lars Rasmussen, the idea to create famous documents came from Tim O’Reilly. Hopefully we’ll be seeing more of these soon.

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We Hold These Truths To Be Awesome: The Founding Fathers Give Google Wave A Try

At a time when publications targeting small business owners are in decline or dying (R.I.P. Fortune Small Business), the Web is thriving with experimentation.  One effort that is just getting off its feet is Bizmore, a site backed by former junk bond king Michael Milken and executive-coaching firm Vistage International.  Bizmore launched last summer as a Q&A site for business advice.  Today, it unveiled a new design with more magazine-like content, including a network of eight blogs, ranging from the Social Business to Workplace Trends and Creative Finance.

“I’ll have 25 blogs before the end of the year,” says editor in chief Jeffrey Davis, who used to work with me as an editor at Business 2.0 before he went on to help run Bnet. Earlier this year, Davis left Bnet to join Bizmore founder Alice Hill to try to build an online publication for small businesses from scratch. Each blog, he says, tackles “some important facet of running a small business (finance, social media, managing, etc), each written not by name journalists, but true experts who speak and consult professionally on their topic.”

Bizmore already has about 30 or so consultants, business professors and other business experts who answer readers’ questions in Q&A part of the site. The blogs expand that network of experts and give some of them a larger soapbox. They will start giving Webinars and live events as well, which is Vistage’s specialty. The original idea of the site was to have an online gathering place with real content for the tens of thousands of people who attend Vistage executive coaching seminars every year, but then lost touch in between events. It’s reaching way beyond that now, but Bizmore’s core audience still comes from this pre-existing community.

In addition to the blogs, the site has regular features, interviews, and advice on methods and tactics for running a small business. Davis is taking a page from the old Business 2.0 here by sending his journalists to find out what management tactics work in real companies and then package them up into easy steps any entrepreneur can follow. Bizmore spits out features such as “3 Essentials for Landing a Business Loan,” “CEOs: Careful Who ‘Owns’ Your Facebook Business Page,” and “The $100K Referral Bonus.”

Bizmore is not about breaking news or great narratives. Its aspiration is to be filled with tons of practical advice on how to run a business, and a network of experts and readers who help each other as well. Getting the right mix between community and content is tricky. But service journalism makes a lot more sense on the Web than in a print magazine. Features and posts can be whipped up on the fly in response to the immediate needs and questions of readers, who can also give each other advice.

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Bizmore Adds A Blog Network To Go After The Small Business Reader

It seems that flight delays could turn into a big business. FlightCaster, the startup that helps predict flight delays long before the airlines themselves usually do, has just landed a $1.3 million funding round led by Tandem Entrepreneurs and Sherpalo Ventures. FlightCaster previously recieved money as part of the Y Combinator program. Today the company is also launching a new API, which developers can learn about here.

FlightCaster’s goal is simple: it wants to let you know when your flight is delayed as early as possible. Using a variety of data sources and complex algorithms, the service will alert you whenever it thinks one of your flights will be delayed, along with an explantation of the factors that contributed to its prediction. And so far, it seems to be working — co-founder Jason Freedman says that four hours below takeoff, Flightcaster manages to predict ten times as many delays as the airlines do. And they manage to stay 90% accurate (which is on par with the airlines).

Back when I first wrote about the startup, I questioned how helpful knowing about a delay in advance really was. After all, FlightCaster’s notifications state that a flight will probably be delayed. But sometimes they’re not, so it isn’t wise to show up at the airport a few hours late. Freedman says the FlightCaster team had the same concerns, but that there are two discrete sets of users who value the service. The first group of users (which is where most people fall) just like having a heads up that their flight is delayed, mostly so that they can warn friends and co-workers that they might be late.

The second group loves FlightCaster for a different reason: they will change their plans if there’s a possibility of a delay. Freedman says these tend to be frequent fliers (likely business travelers) who don’t want to get caught in delay limbo and are willing to pay to swap flights even if a delay isn’t certain.

It’s this second group that will likely prove most valuable to FlightCaster. The company is currently in talks with a number of major travel sites (and even some airlines) to integrate their predictions. Freedman won’t get into specifics yet, but he says some of these partners are interested in helping frequent fliers rebook their flights as soon as there’s a delay alert.

Along with the parters FlightCaster is already talking with, other developers will be able to tap into the Flightcaster API for a fee.

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FlightCaster Takes Off With $1.3 Million In Funding And A New API

There’s a certain type of person for whom airports and airplanes cease to be novel, and start to feel like home. This is depressing, on many levels! Which is why these people need gifts. Lots and lots of gifts.

BTW, if you hate the gallery format as much as the Grinch hated Christmas, click here.

A good pair of in-ear phones: It’s impossible to overstate how valuable these are. Not only do they sound better than your stock earbuds, they dull the chorus of engine sounds, snores, baby cries and not-as-subtle-as-your-seatmate-thinks beanfarts nearly as well as those Bose noise-canceling phones some airlines hand out in first class. As a bonus, you can sleep comfortably in these. Ultimate Ears MetroFi 170s are nice, clear and bassy for about fifty dollars, while Shure’s next-level SE210s can be scrounged for under $100. $50 for the UEs, $90 for the Shures. [Amazon, 2]

An iPod Touch: Yeah, I know, another iPod recommendation. Seriously though, perfect travel gadget: Video and music (and podcasts, sweet podcasts!) are travel must-haves, and games are a massive bonus. But what about apps to keep you busy or productive? White noise machines to put you to sleep? Internet access on the off chance your plane has free Wi-Fi? Look out for better deals come Friday, too. $200 [Apple]

Timbuk2 Commute 2.0: It’s a solid gear bag, with more than enough space for a laptop, DSLR, various accessories and a phone or two, and it’s TSA compliant, meaning you can leave your laptop halfway inside your bag through airport security for a slightly less terrible experience. Retails for about $100 in size medium, though you can find it for a bit less is you look around. $90 [Zappos]

Some juice: Almost every gadget charges by USB nowadays, a habit that the Duracell Instant Charger will happily oblige. It’s most useful as an emergency phone charger, though it’ll work for almost anything.

If your traveling giftee is a Man of the World, consider the Kensington International Adapter with USB. Here’s the theory: said traveler can plug almost whatever he wants into almost any wall socket, and charge his Duracell portable battery at the same time. MAXIMUM ELECTRICITY! $15 for the Duracell, $30 for the Kensington [Amazon, Target]

A stupid neck donut pillow: Because they’re awesome and anybody who says they
aren’t hasn’t slept on an airline cushion for eight hours. Plus, they’re cheap, and you can probably find one at your local Walmart if you don’t want to bother with shipping. $13 [Amazon]

Tethering: It’s a bit nerdy, and you might he some reservations about fiddling with someone else’s phone so much, especially given how sensitive carriers can be to this kind of thing, but if your traveler is aware of the risks, tethering is a wonderful gift. And not just wired or Bluetooth tethering—I’m talking Wi-Fi tethering, MiFi style (and without the extra contract, which would be a terrible gift). It can save money and headaches in hotels or airports with paid Wi-Fi, and it’ll be endearingly nerdy. Free! [For iPhone, jailbreak; for Android, rooting; for Palm, homebrew]

Those laptop privacy shields: People will think you’re looking at porn if you’re using one of these”>one of these, no matter how nice your suit is. Avoid, unless your traveler actually wants to look at porn. $45 [Amazon]

Methanol cell chargers: They’re too expensive to recommend now and it’s difficult to explain to the TSA how exactly they aren’t a dangerous explosive device, and for that matter, why you just don’t carry a normal battery, like a non-scary human? Hmm? These should be easy enough not to buy, since they barely even exist. Still!

Don’t forget to recommend your own favorite travel gadgets in comments-include pics and pricing if possible.

All Giz Wants is our annual round-up of favorite gift ideas, including amazing attainable objects and a few far-out fantasies. We’ll be popping guides catered to different interests several times per day for the next week, so keep checking back.

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Travel Gifts For People Who Sleep On Airplanes More Than In Beds [Giftguide]

Life360, a startup that looks to help families keep their loved ones (and their identities) safe, has closed a $750,000 funding round with investors including Seraph Group, LaunchCapital, Founders Fund (via FF Angel), the Band of Angels, and Mark Goines. The service also recently launched to the public at TechCrunch50’s DemoPit.

Life360 offers a suite of services related to safety and security, which are designed to help prevent everything from losing your phone to losing your personal identity. One example is the site’s Emergency ID service, which provides parents with cards/bracelets for their children that instructs first responders to call a designated phone number in the event of an emergency. Calling that number will activate the service and automatically blast a message to any emergency contacts.

Other services include a Lost & Found product (you put physical tags on your valuables with with instructions on how to return the item to you) and identity protection. Life360 also offers an Android app appropriately called ‘Tracker’ which can be used to keep tabs on children during the day, though founder Chris Hulls acknowledges this isn’t all that practical yet because many children don’t have smart phones.

The company’s goal isn’t necessarily to provide all of these services itself. Rather, it wants to offer a set of core products built in-house, alongside services that are offered by third parties. Life360 works to integrate these services into their dashboard, and makes it easy to sign up for them because it can pre-populate key information. This seems like a smart play given how fragmented/confusing the privacy and security market can be, though I’m wondering if Life360 might have some trouble convincing well established services to play ball (especially if they’re going to be listed alongside competitors).

We’ve briefly covered Life360 a couple times before, when the company won the first Android Developer Challenge (good for a $300,000 award) and then again when it was part of this summer’s fbFund REV.

Life360 Introduction Cartoon from Life360 on Vimeo.

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Life360 Raises $750k To Keep Your Family And Valuables Safe