33 ms·

Agreed, this is a massive fuck-up by everyone involved (Altman, Cruise Board of Directors, Spark Capital, etc). Even if the claim has no merit it should have be

by hendzen 11y ago

Agreed, this is a massive fuck-up by everyone involved (Altman, Cruise Board of Directors, Spark Capital, etc). Even if the claim has no merit it should have been dealt with long ago, before the company got to this stage. Now all the employees might get screwed as a result.

proksoup 11y ago
They did fail to identify the problem .... But if there's any anger from screwed employees, it should be directed at the criminals who did the bullshit crime instead of the detectives who failed to identify the crime sooner, no?
- AndrewKemendo 11y ago
  In this case there is a fiduciary duty from the investors (detectives in your metaphor) to make sure that the company is free from these kinds of things. So while they aren't to blame - they aren't really off the hook either - it's more of a sin of omission. And yes, in many cases when detectives or investigators in law enforcement are lazy with their work and miss something obvious, they often pay for it with their jobs.
  - proksoup 11y ago
    I guess I don't see how this was so obvious.
  - aetherson 11y ago
    Investors do not have a fiduciary duty to the employees. Members of the board of directors (which all investors presumably are not) have a fiduciary duty to the stockholders (which many employees presumably are not).
    - spinlock 11y ago
      VCs have a fiduciary duty to _their_ investors.
      - aetherson 11y ago
        Do they? Serious question. I mean, I assume someone involved in the VC firm has a fiduciary duty to its investors, but it's not like an employee typically has a fiduciary duty to his firm's investors.
- hashkb 11y ago
  There will be enough anger for everyone.
  - proksoup 11y ago
    That's pretty crazy to me.
migep 11y ago
I don't think it's fair to blame all of the investors. The later investors were almost certainly misled, and not informed of this risk. YC on the other hand was clearly informed that there was an individual who was considered a founder at some point in time. Despite knowledge of this risk, they invested and they facilitated follow-on financing. Now there's a big, dumb, expensive problem. YC dropped the ball, big-time. The fact that Sam Altman is turning this into a public spectacle is further evidence that he knows YC fucked up badly, and probably doesn't have a legal case. The only reason to write what he wrote is if you're out of actual ammo.
- hendzen 11y ago
  VC firms are sophisticated investors and are supposed to conduct due diligence on behalf of their L.P's. Part of what the big management fees they charge are supposed to go to is ensuring that each investment is legally sound - i.e. having their people verify the incorporation documents, cap table, etc. So yes, the fact that this situation has become known at this terribly late stage reflects badly on all the investors in previous rounds.
  - migep 11y ago
    I'm familiar with due diligence processes. They're why I believe the later stage VCs are likely the victims of fraud on the part of Cruise's D&Os. All of those investors would've demanded a clean separation agreement if they had any information regarding the co-founder.
- davemel37 11y ago
  > The only reason to write what he wrote is if you're out of actual ammo. This is really astute. In my experience, more often than not, when someone becomes angry at someone else, deep down they are really angry at themselves for letting something happen.
- rpgmaker 11y ago
  > The fact that Sam Altman is turning this into a public spectacle is further evidence that he knows YC fucked up badly, and probably doesn't have a legal case. The only reason to write what he wrote is if you're out of actual ammo. This. That post was a huge red flag and after reading the claim it's very clear why he posted it.

by hendzen 11y ago

proksoup 11y ago

They did fail to identify the problem .... But if there's any anger from screwed employees, it should be directed at the criminals who did the bullshit crime instead of the detectives who failed to identify the crime sooner, no?

AndrewKemendo 11y ago
In this case there is a fiduciary duty from the investors (detectives in your metaphor) to make sure that the company is free from these kinds of things. So while they aren't to blame - they aren't really off the hook either - it's more of a sin of omission. And yes, in many cases when detectives or investigators in law enforcement are lazy with their work and miss something obvious, they often pay for it with their jobs.
- proksoup 11y ago
  I guess I don't see how this was so obvious.
- aetherson 11y ago
  Investors do not have a fiduciary duty to the employees. Members of the board of directors (which all investors presumably are not) have a fiduciary duty to the stockholders (which many employees presumably are not).
  - spinlock 11y ago
    VCs have a fiduciary duty to _their_ investors.
    - aetherson 11y ago
      Do they? Serious question. I mean, I assume someone involved in the VC firm has a fiduciary duty to its investors, but it's not like an employee typically has a fiduciary duty to his firm's investors.
hashkb 11y ago
There will be enough anger for everyone.
- proksoup 11y ago
  That's pretty crazy to me.

migep 11y ago

I don't think it's fair to blame all of the investors. The later investors were almost certainly misled, and not informed of this risk. YC on the other hand was clearly informed that there was an individual who was considered a founder at some point in time. Despite knowledge of this risk, they invested and they facilitated follow-on financing. Now there's a big, dumb, expensive problem. YC dropped the ball, big-time. The fact that Sam Altman is turning this into a public spectacle is further evidence that he knows YC fucked up badly, and probably doesn't have a legal case. The only reason to write what he wrote is if you're out of actual ammo.

hendzen 11y ago
VC firms are sophisticated investors and are supposed to conduct due diligence on behalf of their L.P's. Part of what the big management fees they charge are supposed to go to is ensuring that each investment is legally sound - i.e. having their people verify the incorporation documents, cap table, etc. So yes, the fact that this situation has become known at this terribly late stage reflects badly on all the investors in previous rounds.
- migep 11y ago
  I'm familiar with due diligence processes. They're why I believe the later stage VCs are likely the victims of fraud on the part of Cruise's D&Os. All of those investors would've demanded a clean separation agreement if they had any information regarding the co-founder.
davemel37 11y ago
> The only reason to write what he wrote is if you're out of actual ammo. This is really astute. In my experience, more often than not, when someone becomes angry at someone else, deep down they are really angry at themselves for letting something happen.
rpgmaker 11y ago
> The fact that Sam Altman is turning this into a public spectacle is further evidence that he knows YC fucked up badly, and probably doesn't have a legal case. The only reason to write what he wrote is if you're out of actual ammo. This. That post was a huge red flag and after reading the claim it's very clear why he posted it.