1-b. Within the potential crownsourcing there is mention of wanting to use investors funds for a fecal transplant, this is securities fraud.
How is it fraud of any kind if the investors are told that's what their investment will (or may) be used for?
You are probably right about this but I still see it as a red flag as he suggested using investors funds for personal use rather than on the software itself. I think the best course of action is simply not to handle investors funds directly and avoid that situation altogether, then you never have to worry about cases of securities fraud or the trolling that can come as a result of investors not happy with the use of those funds.