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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 w
by 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 agoVC 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 agoI'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.
- iiiggglll 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. Between this incident and pg's "startups must be allowed to break the law whenever they want or else civilization might collapse" essay a few months ago, it's getting hard to take anything the higher-ups at YC say seriously.
- Russell91 11y agoI think this really hits the nail on the head. "The later investors" here really include everyone except for YC, insofar as investors have heretofor been able to take the YC stamp on a company as certification that these sort of issues have been worked out. I think the end result of this is that you'll see a market correction against YC companies as VC's find they have to put in extra due diligence they didn't have to before. Altman raising attention to this issue may act as a catalyst.