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If we are going to list our own scam experiences here: a company asks for $15mm on a $30mm pre. You better have sales, I say. They do they say. $1 Billion wort

If we are going to list our own scam experiences here: a company asks for $15mm on a $30mm pre. You better have sales, I say. They do they say. $1 Billion worth! What are your margins? 30% they say! Uh, so why don't you go to a bank? Well, you know banks charge an arm and a leg. At this point, I don't believe anything but I ask for the contracts or the POs from the companies (GE! Honeywell!) thinking I would verify them later. I get identical looking POs, adding up to a few hundred thousand, all from unheard of companies.

duxup 7y ago
I'm probably misunderstanding here but these guys said they had $1 Billion in sales, their margins are 30% ... but needed 15 million from you? You'd think with those margins and sales they'd have 15 million just lying around ... for pizza parties or something.
- omarhaneef 7y ago
  This was in future sales for the upcoming year. They had to deliver to make it happen. You see Honeywell had written a $100mm PO to a new company without the factory to produce the product.
  - duxup 7y ago
    Oh, man $1billion just waiting to happen yeah that's suspicious. That would be pretty brave of Honeywell there ... I guess it wouldn't technically cost them anything to have a PO where they maybe had to deliver a product first but big company like that looking at someone without a factory would more likely get a "lol k thanks bye" than a PO ;) Seems unlikely they'd bother to even plan to sell a product that isn't a thing yet tied to some nobody without means to produce it.
    - simonebrunozzi 7y ago
      I would assume that the honeywell PO worth $100M was part of the scam, and therefore no "braveness" on their part.
      - duxup 7y ago
        That's my assumption too. I was just pointing out all the reasons that it seemed strange.
Bartweiss 7y ago
Over on the employment side, I got a summer job pitch in college from a hot new startup building some kind of app to help turn activity tracker output in actionable info. A startup of four people. "This sounds interesting, but I'm wondering why you're looking for a fifth employee who's only going to be around for a few months instead of someone committed?" "We don't want to shorten our runway with salaried hires too fast, but we're expecting to close funding within the next year, so we can bring back the summer hires full-time after graduation and you'll already be ramped up." "So you have some runway now, and you're negotiating more funding - you've raised angel funds and are working out Series A?" "Well, we're still at 'friends and family' and we haven't pitched VCs yet, we don't want to dilute the company too quickly. But we're starting to sound out investors and we've had a lot of interest!" "So if you're that early on, are you looking at hiring purely in stock? How will that work with the temporary role?" "Obviously we can't give people shares just for a summer of work, and we don't want to plan too far into the future since we don't know our timeline yet. But once we close this funding we'll of course be making very competitive salary hires with stock grants." "So it's contract work with the potential to become an early startup employee later? I don't mean to obsess about salary, but I see it's in New York City and I'm going to need to pay rent." "Well it's not contract work as such, we want people more dedicated to our mission than that. But I guess I could talk to the other founders about putting together some sort of housing stipend." "So, it's an unpaid internship in NYC, and you're not willing to put anything beyond that in writing?" "..." Just for fun, I kept talking for long enough to find out the top-secret details of what the app actually did, which took some doing. It was going to assess your activity level and "holistic well-being" to present a "supportive audiovisual experience". They'd stapled a 2000-era WMP music visualizer to a mood ring.
- omarhaneef 7y ago
  Ugh. I’m glad you were aware enough to ask the right questions. However, I will add that whatever poor judgements people make there is just this line that is crossed with actual falsehoods that is hard to undo. Whatever mistakes these would be employers made, at least they told the truth.
  - Bartweiss 7y ago

duxup 7y ago

I'm probably misunderstanding here but these guys said they had $1 Billion in sales, their margins are 30% ... but needed 15 million from you? You'd think with those margins and sales they'd have 15 million just lying around ... for pizza parties or something.

omarhaneef 7y ago
This was in future sales for the upcoming year. They had to deliver to make it happen. You see Honeywell had written a $100mm PO to a new company without the factory to produce the product.
- duxup 7y ago
  Oh, man $1billion just waiting to happen yeah that's suspicious. That would be pretty brave of Honeywell there ... I guess it wouldn't technically cost them anything to have a PO where they maybe had to deliver a product first but big company like that looking at someone without a factory would more likely get a "lol k thanks bye" than a PO ;) Seems unlikely they'd bother to even plan to sell a product that isn't a thing yet tied to some nobody without means to produce it.
  - simonebrunozzi 7y ago
    I would assume that the honeywell PO worth $100M was part of the scam, and therefore no "braveness" on their part.
    - duxup 7y ago
      That's my assumption too. I was just pointing out all the reasons that it seemed strange.

Bartweiss 7y ago

Over on the employment side, I got a summer job pitch in college from a hot new startup building some kind of app to help turn activity tracker output in actionable info. A startup of four people. "This sounds interesting, but I'm wondering why you're looking for a fifth employee who's only going to be around for a few months instead of someone committed?" "We don't want to shorten our runway with salaried hires too fast, but we're expecting to close funding within the next year, so we can bring back the summer hires full-time after graduation and you'll already be ramped up." "So you have some runway now, and you're negotiating more funding - you've raised angel funds and are working out Series A?" "Well, we're still at 'friends and family' and we haven't pitched VCs yet, we don't want to dilute the company too quickly. But we're starting to sound out investors and we've had a lot of interest!" "So if you're that early on, are you looking at hiring purely in stock? How will that work with the temporary role?" "Obviously we can't give people shares just for a summer of work, and we don't want to plan too far into the future since we don't know our timeline yet. But once we close this funding we'll of course be making very competitive salary hires with stock grants." "So it's contract work with the potential to become an early startup employee later? I don't mean to obsess about salary, but I see it's in New York City and I'm going to need to pay rent." "Well it's not contract work as such, we want people more dedicated to our mission than that. But I guess I could talk to the other founders about putting together some sort of housing stipend." "So, it's an unpaid internship in NYC, and you're not willing to put anything beyond that in writing?" "..." Just for fun, I kept talking for long enough to find out the top-secret details of what the app actually did, which took some doing. It was going to assess your activity level and "holistic well-being" to present a "supportive audiovisual experience". They'd stapled a 2000-era WMP music visualizer to a mood ring.

omarhaneef 7y ago
Ugh. I’m glad you were aware enough to ask the right questions. However, I will add that whatever poor judgements people make there is just this line that is crossed with actual falsehoods that is hard to undo. Whatever mistakes these would be employers made, at least they told the truth.
- Bartweiss 7y ago