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Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator. You need to make bets everywher
by robbiep 4y ago
Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator. You need to make bets everywhere and hopefully some stick. The other side of that is some don’t stick, and some go proper pear shaped. Make enough bets, it has to happen.
I’ve got no idea what their original pitch is, I certainly wouldn’t back a crypto startup that ostensibly aims to do something like what it looks like they tried to do, but if I was making 300 bets a couple times a year I’d be silly not to do something in the space.
Whether a ycombinator seal of approval lead to investment which lead to consumers getting fleeced and culpability in that situation, I don’t know. It’s crypto. If you’re silly enough to think it’s a safe investment, you’re blind. A company can also say a lot of things differently from first pitch to accepting millions from consumers. As an investor with 10%ish equity, you’ve got some sway, but you don’t have much sway. And who is to say their bet isn’t the right one.
A stain, but I don’t know about righteous indignation, I don’t know how much culpability transfers back to yc… but I don’t feel it’s a whole lot
- blitzar 4y ago> not making any bets in crypto is not a sensible accelerator. You need to make bets everywhere and hopefully some stick. Thats not how it works; VC's are allowed to pass on anything they want, and it turns out they dont cut a fat cheque to every idiot who knocks on the door.
- gitfan86 4y agoAnd how many Porn companies has YC funded? Zero as far as I know, is that because porn related companies have zero chance of being profitable? Or is it that they take a moral stance against that industry?
- blitzar 4y agoNor as far as I know are they in the asphalt industry, likely because they are focused on tech. I am sure some people out there find asphalt a moral issue (I personally dont) but I suspect they are not spraying some funding around in that industry because it isnt really of interest to them or their investors.
- gitfan86 4y agoImplying that the Porn industry has no overlap with Tech is a stretch. Over 30% of internet traffic is adult content.
- blitzar 4y agoI implied nothing of the sort. Porn is 99% tech these days. Ashpalt laying is 1% tech.
- Scoundreller 4y agoLots of asphalt tech opportunity, just not so much electronic tech. And timelines are long. I’m disappointed that we still do cold patches instead of heating the surrounding asphalt when filling potholes. That’s where I’d transfer soldering technology into asphalt.
- anamax 4y agoYC only invests in companies that have a reasonable chance of having an exit. Porn companies don't have exits.
- ulzeraj 4y agoThe problem here is not a bet on crypto but a company that basically went "oh hey sorry too bad the USD displayed on your account is actually UST. K thx bye".
- robbiep 4y agoI think I cover that. Company does not equal backer. Bad behaviour by company is not the responsibility of investors, it’s the responsibility of the board, the exec, and ultimately the courts. Investors can shape and influence, investors hopefully provide a filter and feedback, but everyone can get swept up in a good story. Company should be caned. Yc? I’ve already said what I feel.
- pmyteh 4y agoIt's not the legal responsibility of the investors, because society has given them limited liability. It may or may not be their moral responsibility, depending on what they knew, encouraged, or whatever. And the usual payoff for morally-shady but legally-blameless behaviour is reputational damage.
- formerkrogemp 4y agoY-Combinator exists to make Paul Graham and it's investors money. Morality is not money. Y-Combinator doesn't exist to make morality for its investors.
- etrautmann 4y agoThis is not a good argument. Of course companies can optimize for multiple objectives and to pretend that any company doesn’t is willfully blinding oneself to reality.
- UncleMeat 4y agoMaybe it'd be better if our society reprioritized so "these organizations are all amoral actors who exist for no other purpose except to fatten the wallets of their owners" isn't the assumed norm.
- CPLX 4y agoIf you’re financially backing and providing direct hands on strategic guidance to an active and blatant scheme to commit securities fraud then you are doing something you should not be doing. The previous sentence isn’t and shouldn’t be particularly controversial.
- jsjohnst 4y ago> If you’re financially backing and providing direct hands on strategic guidance to an active and blatant scheme to commit securities fraud then you are doing something you should not be doing. As you wrote it as a generic hypothetical, no, it’s not really controversial to me. If however you are meaning to say it as a passive aggressive way to accuse YC, yeah, it very much is controversial. To not be controversial (for me anyway), you’d need to meet some burden of proof with evidence. How much would be enough to meet that burden? I’m not sure at this moment, but as you’ve presented zero that I’ve seen, I think “more than zero” is a fair starting point.
- CPLX 4y agoBy definition, a “YC Company” is given hundreds of thousands of dollars and direct hands on strategic advice on how to run the company. That’s the meaning of the concept. The company in question has blatant securities fraud as their core business model. QED Here’s a logical construct in return. When people you like do unethical things they are still unethical.
- jsjohnst 4y agoI feel like there’s a lot of leaps in your “logical construct” there. First and foremost, did YC approve of this “core business model”? Sure, the founders got into YC, but did they pivot during the program (frequently happens)? And while YC may be on the board, they don’t have controlling interest either. So yeah, there’s a lot of scenarios where people “you know” and/or “partner with” do unethical things, but that fact alone doesn’t mean you are unethical. You very well could be, but guilt by association isn’t enough proof here imho.
- 4y ago
- IMTDb 4y ago> Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator. That's why we have the concept of "due diligence". YC is absolutely allowed to make bets in the crypto world; but they have a brand name and a reputation of serious investors. I know that when I see the YC logo on a new product I discover, it serves as a signal. And having a fraud company being allowed to use the YC brand on their website, because YC wanted to work with them and gave them money to allow them to grow (meaning: "cheat on more people") is definitely a stain on their track record
- unicornmama 4y agoSocial-proof does not replace due diligence. The Theranos investors whose money followed big name investors paid dearly for this lesson.