By Jacob Adelman

Elon Musk's X says it wants to shake up financial media with a reality TV show that forms a key plank of its original programming initiative. The series, Going Public, introduces promising start-ups that viewers can invest in while they watch. The final episode, which airs live on Friday, will feature a "Click-to-Invest" button.

Going Public "embodies our commitment to giving smaller investors a voice, as well as the chance to own a piece of the future," Brett Weitz, then X's content chief, said as the social-media platform announced its "landmark partnership" with the show earlier this year.

Viewers will need to do their own vetting. The founders of one featured start-up -- Dutch Mendenhall and Amy Vaughn -- have been under investigation by state and federal regulators, Barron's has learned. Some investors in their previous venture, RAD Diversified REIT, say the business cost them their life savings.

Mendenhall and Vaughn didn't reply to a list of questions from Barron's.

Spotlighting start-ups could invite new scrutiny for X, which has dealt with allegations of misinformation on its platform and has seen a string of missteps in its push to build a viable original-content business.

"There's a big difference between building financial literacy and turning fund-raising into reality TV," says social-media consultant Matt Navarra.

Going Public is part of a new programming lineup at X that also includes a Khloé Kardashian talk show and a business program hosted by prominent crypto investor Anthony Pompliano. Darren Marble, co-creator of Going Public, has described his show as " Shark Tank meets Apprentice, where there is a real-time investing component."

"F*ck CNBC. Forget Bloomberg. Ignore FOX," Going Public's producers wrote in a June 3 promotional email sent to the show's mailing list. "They missed the mark -- we're rewriting the rules."

Over the course of four prerecorded episodes, company founders perform adrenaline-fueled stunts -- blasting junked cars with guns, dangling from a supertall skyscraper -- to prove their entrepreneurial grit. They sit for interviews in a hangared jet while wired to "the Going Public polygraph." They engage with dance music impresario Steve Aoki, poker champ Phil Hellmuth, and a venture capitalist, Cyan Banister, who appear as backers and mentors.

Baseball Hall of Famer CC Sabathia is presented on the show as a potential investor in Mendenhall and Vaughn's new venture, a turnaround firm for struggling golf courses called OmniCo Golf.

"CC committed to a show appearance," a spokesperson for Sabathia tells Barron's. "After the pitch was made, he had his team do due diligence and passed on the investment opportunity."

This season's other featured start-ups are a cashew-based beverage company co-founded by celebrity videogamer Tyler "Ninja" Blevins and a business-software maker.

During the season's livestreamed finale on Friday, viewers will be able to buy shares in the start-ups through crowdfunding provisions enabled by the 2012 legislation known as the Jobs Act.

"No velvet rope. No closed doors," the Going Public website promises. "This is your insider access to the deals and insights defining tomorrow."

This report is based on interviews with former employees of RAD Diversified REIT, all of whom asked not to be identified, and with past RAD investors. Barron's also reviewed internal company communications, including recordings of closed-door teleconferences with top investors, as well as hundreds of pages of legal filings, regulatory disclosures, and property records.

Going Public receives financial compensation for promoting the start-ups that appear on the show. An entity controlled by Mendenhall paid $500,000 to publicize the offering of OmniCo securities, according to a disclaimer page on the Going Public website. Mendenhall also invested $500,000 in the show's production company, according to the disclaimers.

Going Public's pay-to-play arrangement expands on the social-media ad campaigns touting market-beating returns that Mendenhall and Vaughn used to recruit investors for their Tampa, Fla.-based RAD real estate fund.

In an April videoconference with top investors, Mendenhall said RAD's real estate portfolio was worth as much as $180 million. The company has over 7,000 investors, Vaughn said in a Facebook Reels video posted in January.

Former employees tell Barron's that the sky-high returns touted in RAD's ads were based on valuations set by RAD executives, not outside appraisers. RAD investors who have filed lawsuits against the company alleging breach of contract have obtained judgments against the company, which offered no response to the claims.

Some investors and former employees say they've been interviewed by Securities and Exchange Commission investigators about the company's practices. Florida's Office of Financial Regulation is also investigating RAD, according to a message sent to investors soliciting testimony.

An SEC spokesperson said the agency doesn't comment on the existence or nonexistence of a possible investigation. The Florida regulator didn't respond to a phone message.

In episode two of Going Public, Mendenhall, whose uses his given name Brandon on some RAD disclosures, is attached to the polygraph machine and asked if he's ever had investors accuse him of stealing their money.

"Yes," Mendenhall says, before explaining that the claims were due to clerical delays during a former chief financial officer's illness.

The scene ends without the polygraph operator providing any results.

During the April videoconference, Mendenhall portrayed RAD as under siege from "haters" and the Going Public creators as allies. When two unhappy RAD investors contacted Going Public to share their complaints about RAD, Mendenhall said, the show advised them to "file a lawsuit."

"I'm not going to say Going Public told them to piss off," Mendenhall told the conference participants. "But Going Public told them to be adults."

Marble and his Going Public co-creator Todd Goldberg didn't respond to questions about Mendenhall's recollection, the show's financial arrangements, or their due diligence surrounding RAD. X also didn't respond to messages seeking comment.

Goldberg had spent time in medical-device marketing and Marble was a specialist in crowdfunding investments when they formed their production company for Going Public in 2020.

After streaming two seasons of the show on legacy media websites, Goldberg and Marble secured a brief introduction with X CEO Linda Yaccarino at a hotel bar in Dallas in August 2024.

"Within two minutes, she's like 'I love it, let's do it,'" Marble recounted in a recent podcast interview. "She said, 'We move quick, we use simple agreements.' And sure enough, two months later, the deal was signed."

X's licensing and distribution arrangement for Going Public represents "a pivotal moment in media and investment landscapes, directly challenging traditional financial media platforms," X said when announcing the deal.

X's past efforts with video have yielded mixed results, but its setbacks have attracted the most attention. Paris Hilton dropped a content deal after raising concerns about antisemitic material on the platform. Tucker Carlson abandoned X to launch his own site. And Don Lemon's program was canceled following a tense interview with Musk.

After Musk acquired Twitter in October 2022, he pushed away major advertisers by firing safety and ad-sales teams, reversing bans on controversial accounts, and imposing erratic moderation policies. In 2023, Musk said the social-media site had seen a 50% drop in ad revenue.

Original programming could attract new audiences and win back advertisers.

"Where there's an investment in original programming, there will be an audience," says Brian Wieser, head of media consultancy Madison & Wall.

At the CES tech showcase in January, Yaccarino cited Going Public as an example of how creators can "find their people" on X.

"We have a new show called Going Public," she said, "where you, the audience, can actually get involved, watch, and actually invest in companies."

This season of Going Public, its third, marks a new push for a mainstream audience by its creators. The first season of the show ran on Entrepreneur.com. The episodes no longer appear on the site.

Season two of Going Public ran as part of an advertising campaign hosted on MarketWatch.com. That content ran in a walled-off part of MarketWatch's site and was labeled as custom content -- a designation for paid promotional material. (MarketWatch and Barron's are both owned by Dow Jones, a unit of News Corp.)

A Dow Jones spokesperson said the Going Public season was a one-time campaign under a routine sponsorship agreement. Dow Jones had no role in the content, she said. An Entrepreneur.com spokesperson didn't respond to messages about the show.

X includes the Going Public content on its new X Originals feed, without disclaimers.

"The legacy media has standards for the type of content they're going to share with their audiences," says Michelle Amazeen, a Boston University communications professor. "Social-media platforms have much less stringent standards, if any."

On a Going Public episode released last month -- in advance of this week's funding episode -- Mendenhall shares his populist vision with World Series champ Sabathia for a golf course empire where people from all walks of life are invited to become fractional-stake club owners.

"My thing is, more Americans will own golf courses because of us, I believe, in the next 12 months than has existed in the entire history of America," Mendenhall says.

While touring OmniCo's first project, the Wentworth Golf Club near Tampa, Mendenhall tells Sabathia about the property's rundown state when he and Vaughn acquired it. "But that's what I've always invested in: the broken and the damaged," Mendenhall says.

Mendenhall's previous business, RAD, was organized as a real estate investment trust, a type of company that owns or finances property and -- in return for paying most of its profits to investors as dividends -- receives special tax advantages.

Most REITs are publicly traded, which means that their stock is bought and sold on public exchanges, with their share prices fluctuating according to investor demand.

RAD is part of a relatively small class of real estate companies known as nontraded REITs, which raise money by selling shares directly to investors through brokerages and financial advisors, rather than on open markets.

Since nontraded REITs aren't listed on a stock exchange, the companies themselves determine their share prices. They typically do this by totaling the appraised value of their real estate and other assets, subtracting liabilities, and dividing the result by the number of shares outstanding. Higher asset values, therefore, mean higher share prices.

RAD REIT shares rose 150% between October 2019 and July 2023, advancing even during the worst of the coronavirus pandemic, according to data on the company's website. The S&P 500 index appreciated about 47% over that period.

RAD's disclosed values didn't always reflect reality. In 2022, an article by this reporter in the Philadelphia Inquirer showed that some of the houses that RAD listed in disclosures as having soared in value over their purchase prices had badly deteriorated since RAD bought them. One apparently vacant row house with boarded windows in a depressed Philadelphia neighborhood was listed by RAD as generating $14,400 a year in rent.

RAD told the Inquirer that it works to "comply with all securities, licensing, landlord-tenant, and other applicable laws and regulations."

In recent interviews with Barron's, former employees said property values were inflated to fuel share price increases. RAD generated those valuation estimates itself, according to former employees, rather than hiring outside appraisers to set the value of individual properties, as is common among many nontraded REITs.

In 2022, after the SEC began probing RAD, the company's managers set up a now-defunct firm called Asset Evaluator and put RAD's recently retired loan-department chief in charge to rubber-stamp the inflated valuations, former employees say. Corporate filings and the LinkedIn profile of the retired executive, who has since died, corroborate the role change.

In February 2024, the SEC effectively blocked RAD from raising money from unaccredited investors, the firm's securities filings show. Former employees say RAD had failed to obtain a CPA-approved audit and other required financials.

The development seems to have had an immediate impact on RAD's operations: That same day, RAD filed a public notice informing investors that it was temporarily freezing their ability to exchange their shares for cash -- a suspension that was later extended indefinitely.

The turmoil that followed the share-redemption halt was the latest wave of chaos in a long-disorderly workplace where raising money from investors consistently took precedence over managing it, former employees say.

The company never upgraded its primitive bookkeeping system, which relied in part on Google Sheets, even as online ad campaigns began pulling in exponentially more money and the business grew increasingly complex, the employees say.

Investors were routinely misled about how their money was being used. For example, funds accepted from individual participants in property-flipping ventures to renovate specific homes were often diverted to unrelated expenses, such as covering loan payments on other properties on the brink of foreclosure, according to multiple employees who worked in financial roles at the company.

Multiple former employees interviewed by Barron's say they're owed back pay and severance months after being let go. Some say they discovered RAD hadn't remitted health and unemployment insurance premiums that it had withheld from their final paychecks.

As of last month, nearly 200 properties owned by RAD or an affiliate across Pennsylvania, New Jersey, Texas, Idaho, and Florida were in some stage of foreclosure, according to data provided by Attom. That accounts for about a third of its property holdings, according to Barron's calculations based on the Attom data.

On June 3, RAD's landlord at its Tampa headquarters secured an order for law enforcement to evict the company over nonpayment of rent since November, court records show.

For many investors, buying into the REIT after clicking on a social-media ad was merely a first step toward ever-deepening involvement with the company. Investors were soon also invited to join RAD's "Inner Circle," a "training-and-coaching" program that cost enrollees up to $50,000.

Inner Circle membership qualified investors to participate in "joint ventures," marketed as partial direct ownership in individual property flips. Inner Circle members were also approached to extend "hard money loans" to RAD, for which they were promised interest rates as high as 20%, with repayment beginning within months.

One investor alleged in a lawsuit, uncontested by RAD, that she purchased a partial stake in a property that the company later sold without informing her or providing her any proceeds. The investor also alleged that RAD made no payments on a hard money loan she extended to the company, an experience echoed by investors interviewed by Barron's who made such loans.

David Ernst, a custodian at a public middle school in southeastern Massachusetts, says he was drawn to RAD by the soaring REIT stock price it boasted in its Facebook ads.

He made a $30,000 investment in the REIT using funds that he transferred from his T. Rowe Price individual retirement account to a "self-directed" IRA, at RAD's instruction.

With the value of the REIT shares in the new account climbing, Ernst was emboldened to invest more. He took out a $100,000 home-equity loan, which paid for an Inner Circle membership and a $50,000 joint venture stake in a Tampa-area fix-and-flip project that he was told would bring him a big return within a year.

Three years later, the property still has not been sold. RAD Diversified owes more than $12,000 for the house in property taxes, for which it is two years delinquent, county records show.

"I've come to a conclusion that I'm not going to see any of this money," Ernst says.

Ernst says he was interviewed by an investigator with the SEC earlier this year.

Another investor, Kevin Mantell, a sales consultant for a home-improvement company in New Jersey, also says he's spoken with SEC investigators and is frustrated with the agency's apparent inaction.

The SEC had been aware of issues at RAD since at least 2021, when the agency received a whistle-blower complaint alleging that it was lying to investors about the value of its property holdings, according to the Inquirer. The complaint was submitted by Barry Minkow, a convicted fraudster turned self-styled whistle-blower, who gathered material for the report by pretending to be a potential investor.

"It's clear to me that the SEC has dropped the ball," says Mantell, who tallies his losses from RAD loans and investments at $200,000.

Mendenhall addressed the SEC probe in his April videoconference with top investors -- a stalwart bunch known as the "One Percenters" for the 1% ownership that members were marketed in RAD Management, a Mendenhall-led firm that earns fees for running the REIT.

He asked each participant to contribute $20,000 toward a multifaceted legal effort that would include a billion-dollar class-action lawsuit against the SEC for "what they did to us as an organization."

Mendenhall also assured participants on the call that a payout was on the way, when OmniCo Golf -- the venture being promoted on Going Public -- takes full control of the Wentworth course.

"You'll be able to make choices with what you want to do with that cash, " Mendenhall said.

One option: "Move forward into what I think is going to be a golf course fund that buys lots and lots of golf courses, which is pretty cool."

Mendenhall will get to make his pitch to a new set of potential investors on Friday, live on X.

Write to Jacob Adelman at jacob.adelman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 12, 2025 12:07 ET (16:07 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.