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In general, I understand and support the idea that, should your startup not go well, you fail, wrap things up, and move on. It's too big of a risk to stake you
by CaliforniaKarl 8y ago
In general, I understand and support the idea that, should your startup not go well, you fail, wrap things up, and move on. It's too big of a risk to stake your entire life on one venture, and my understanding is that VC firms, angels, and the like all understand that this can happen when they invest in a startup.
That risk is not something that is understood by most end users, where in this case "end users" includes landlords and other people "on the ground". Those people made an agreement with the startup in good faith, and I contend that faith has been violated, to the potential financial ruination of (at least) a subset of the tenants, and possibly (depending on their financial position) a fair subset of the landlords.
(It's worth noting the Reddit post was made about a day ago. In my rental agreement, for example, I would now be in violation for failing to pay rent to the landlord. I expect many of the tenants are now in that same position.)
I contend that you should not be allowing things like this to be precipitated.
Yes, I'm looking at you, YC. Yes, I'm looking at you, A16Z. And all of the other VC organizations, _and their alumni networks_. With this case serving as an example, I think you have a self-policing problem.
You might say something along the lines of "Oh, it [the startup] wasn't affiliated with any of us", or "Oh, that 'VC' isn't an actual VC", or "Oh, we didn't know them". In an instance like this, I don't think that matters. What matters is two things:
1. If not illegal, I contend that the actions of the startup (and maybe the VC) were at least highly immoral.
2. From the landlord's perspective, they see this as a startup and a VC. Maybe that's not what they actually were, but that doesn't matter. For this point, it doesn't matter what the reality was, it matters what the perception _is_.
I suggest two actions:
1. You (the same collective 'you' as above) should immediately reach out to the poster, to learn both about their tenants and to get in contact with the representative that the landlord was working with. You should then use that contact to identify other landlords where this has happened. Make the tenants whole through at least April, if not April and May.
2. Create a framework to prevent things like this from happening. I admit that I'm being _way_ to vague here, but that is because I do not have enough expertise in what you do, to make a concrete suggestion. Instead, I am calling out the problem, so that you can use your knowledge and experience to formulate a solution. For example, many of you have talked about—or otherwise targeted—basic income. Why not tackle this first.
- icebraining 8y ago> Make the tenants whole through at least April, if not April and May. Are you saying that organizations that just happen to be in the same general business should be covering for the fraud of unrelated companies? Should Stanford be paying back the students of Belford University?
- tialaramex 8y agoIt depends whether your industry wants to have a good reputation or not. If you're OK with all being seen as scum who try to get whatever they can, I guess not. Suppose an airline collapses, leaving passengers stranded. Better run airlines _could_ say "Sucks to be you, choose a better airline next time" and charge full fare to anybody stranded trying to get home. But actually they mostly don't do that, usually "rescue" fares will be offered at a steep discount to secure good will. A customer who has a now worthless $500 ticket often finds that a rival company will swap that plus $50 for a ticket home on their plane.
- ipython 8y agoActually, that exact scenario just happened with Wow! Air (Iceland discount airline)... while rival airlines have advertised so-called 'rescue fares', actually obtaining them is another story all together (at least judging from the comments on TPG[0]) [0] https://thepointsguy.com/news/these-airlines-are-offering-rescue-fares-to-stranded-wow-air-passengers https://thepointsguy.com/news/these-airlines-are-offering-re...