4 ms·

> YC doesn't operate YC companies. They're investors. YC also offers mentoring and coaching services, which goes beyond what a traditional investment firm does

by imiric 2y ago

> YC doesn't operate YC companies. They're investors. YC also offers mentoring and coaching services, which goes beyond what a traditional investment firm does. That's part of their appeal, anyway. > They're not looking at your code. They're almost certainly not doing any meaningful technical due diligence. Maybe they should? If their job is to find talented, and hopefully also ethical and honest, people, then doing a basic check like ensuring that the project they're being pitched was actually authored by the candidates should be part of the vetting process. If, OTOH, their job is to bet on anyone who's likely to give them the highest ROI, regardless of their personal values, then they don't need to do any of this, and cases like PearAI should be acceptable. But that's not what YC claims to be about. > The whole point of YC is that they're investing in big batches of startups, at a scale that is a big multiple of what an A-round VC does in a whole year. Maybe that's part of the problem then. When you're trying to fund and mentor hundreds of companies in a few months, it's impractical to think you'll be able to successfully screen all of them. But the startups must grow...

tptacek 2y ago
Having seen/participated in it firsthand several times, I don't believe priced, institutional A-round technical due diligence would have turned any of this up. It is not realistic to think YC would have.
- bambax 2y ago
  The problem is not with tech due diligence. YC can never say enough that they invest in people, that only the people matter, etc. "Founders, Founders, Founders" is YC's answer to Balmer's "Developers, Developers, Developers". That they decided to fund bros that simply copy-and-paste others' code (!) and are happy to declare publicly that they "chatgpt'd the licence" (!!) and "can't be bothered with legal" (!!!) is... alarming?
  - tptacek 2y ago
    The things you're talking about appear to have happened (or surfaced) after YC accepted them into the Fall cohort.
    - bambax 2y ago
      Yes, but it doesn't matter, because the point is not "what could have been discovered by a proper due diligence", it is: "is YC a good judge of character".
      - tptacek 2y ago
        That's quite a bar to set for any organization.
  - shawndrost 2y ago
    One thing that's happening here is that YC believes "sloppy copy-paste is Good, Actually" more than you do. Maybe more than is polite to say in public. I don't mean to defend PearAI, which seems to be doing dumb and unacceptable things. But in YC's circles, if you say "I can't be bothered with legal" about something, they would be more likely to say "yeah makes sense" than "!!!". If YC rejected everyone who was offended by sloppy shortcuts, they would not be YC, and they would have rejected many of their unicorns. Shortcuts are core to the professional practice of founding startups in the culture of YC. Even the sloppy kind that offend people, like Airbnb's launch-era marketing that violated Craigslist's TOS, or Reddit's founders posting under fake accounts. The message of YC during the program is that you have exactly one job: make your key metric (revenue, users, whatever) grow 5%-10% week-over-week. When founders internalize this, they often do work that contains shortcuts, including shortcuts which might offend people. It is a challenge for some people with a professional or personal aversion to sloppy shortcuts. (This isn't to say that sloppy is the standard at YC. "Sweat the details until 100 users really love your product" is canonical YC wisdom. Time forces you to be sloppy on everything else. And if you tell a YC partner that you're just buying bot traffic to hit your numbers, they will tell you that is a dumb plan.)
    - bambax 2y ago
      Yes, you're right and I agree with you, but there's a difference between doing borderline things (and dealing with the consequences), and not giving a sh*t one way or the other. There's also a difference between "fake it until you make it" and trying to sell someone else's work as your own, that you didn't make and arguably don't even understand. But in the end it's possible the only actual difference between a crook and a master of the universe is one got caught and the other didn't.
- threeseed 2y ago
  > I don't believe priced, institutional A-round technical due diligence would have turned any of this up I've only done it once but doing a cursory check of the commits and who owns the copyrights etc is pretty fundamental during due diligence.
  - tptacek 2y ago
    I'm skeptical. I don't think this "vetting" argument is a real thing. And, again: you're talking about a priced A round, where the legal costs alone are into the six figures. For YC? Come on.
    - threeseed 2y ago
      You're making it sound like this is complicated. It takes minutes to go through a public Git commit history.
      - theptip 2y ago
        It takes minutes to find this specific issue in hindsight. It is laughable to claim that you can do a meaningful audit of a codebase in minutes.
        rlnvlc 2y ago
        Not in this case.
YetAnotherNick 2y ago
Good technical due diligence from reputed organization costs something like $50-100k. Good legal/accounting due diligence costs the same amount. Which is >20% of what YC invests. Even if 20% are committing clear fraud, it is worth it to pay them. Actual numbers are likely lower.
- tempodox 2y ago
  I can't help thinking that there has to be something inbetween doing nothing and going all the way.
  - DonHopkins 2y ago
    Like sitting down with them for five minutes and talking, to see if they say shit like "dawg I chatgpt'd the license".
    - tptacek 2y ago
      Don, do you honestly think that's a lapse in the process, or are you just joining in to dunk on this random company? You think the YC interview involved licensing questions, and, if it did, that they "dawged" their way through it?
      - DonHopkins 2y ago
        Less about licensing in particular, more about simply not being serious or conscientious about what they're doing. Not just the "dawg" but the following "... we busy building rn can't be bothered with legal". ...or punctuation, capitalization, and grammar, apparently. And what else can't they be bothered with? https://news.ycombinator.com/item?id=41702003 https://news.ycombinator.com/item?id=41702003 elicksaur: Why would you believe anything this person says after that? Default assumption #1 is any writing they output is an LLM product and insincere. Assumption #2 their actions are taken with little thought or intentionality. JohnFen: ... This one line tells me that's an outfit that should be avoided entirely. It's either unfathomable incompetence, or a strong aversion to doing things properly. Either way, it says nothing good. JumpCrisscross: ... The move that dials the dumbassery to eleven is using it as a defence. On Twitter. Like, Exhibit A for any lawsuit that company is ever in will be this tweet: it demonstrates a proud disrespect for law and contracts. That’s high-proof mens rea if I’ve ever seen any. https://x.com/anothercohen/status/1840515897804623882 https://x.com/anothercohen/status/1840515897804623882 Alex Cohen @anothercohen It’s not just the actual legal issues but generally the dismissiveness and sloppiness towards real concerns but I guess good on you all for making the appropriate changes

by imiric 2y ago

tptacek 2y ago

Having seen/participated in it firsthand several times, I don't believe priced, institutional A-round technical due diligence would have turned any of this up. It is not realistic to think YC would have.

bambax 2y ago
The problem is not with tech due diligence. YC can never say enough that they invest in people, that only the people matter, etc. "Founders, Founders, Founders" is YC's answer to Balmer's "Developers, Developers, Developers". That they decided to fund bros that simply copy-and-paste others' code (!) and are happy to declare publicly that they "chatgpt'd the licence" (!!) and "can't be bothered with legal" (!!!) is... alarming?
- tptacek 2y ago
  The things you're talking about appear to have happened (or surfaced) after YC accepted them into the Fall cohort.
  - bambax 2y ago
    Yes, but it doesn't matter, because the point is not "what could have been discovered by a proper due diligence", it is: "is YC a good judge of character".
    - tptacek 2y ago
      That's quite a bar to set for any organization.
- shawndrost 2y ago
  One thing that's happening here is that YC believes "sloppy copy-paste is Good, Actually" more than you do. Maybe more than is polite to say in public. I don't mean to defend PearAI, which seems to be doing dumb and unacceptable things. But in YC's circles, if you say "I can't be bothered with legal" about something, they would be more likely to say "yeah makes sense" than "!!!". If YC rejected everyone who was offended by sloppy shortcuts, they would not be YC, and they would have rejected many of their unicorns. Shortcuts are core to the professional practice of founding startups in the culture of YC. Even the sloppy kind that offend people, like Airbnb's launch-era marketing that violated Craigslist's TOS, or Reddit's founders posting under fake accounts. The message of YC during the program is that you have exactly one job: make your key metric (revenue, users, whatever) grow 5%-10% week-over-week. When founders internalize this, they often do work that contains shortcuts, including shortcuts which might offend people. It is a challenge for some people with a professional or personal aversion to sloppy shortcuts. (This isn't to say that sloppy is the standard at YC. "Sweat the details until 100 users really love your product" is canonical YC wisdom. Time forces you to be sloppy on everything else. And if you tell a YC partner that you're just buying bot traffic to hit your numbers, they will tell you that is a dumb plan.)
  - bambax 2y ago
    Yes, you're right and I agree with you, but there's a difference between doing borderline things (and dealing with the consequences), and not giving a sh*t one way or the other. There's also a difference between "fake it until you make it" and trying to sell someone else's work as your own, that you didn't make and arguably don't even understand. But in the end it's possible the only actual difference between a crook and a master of the universe is one got caught and the other didn't.
threeseed 2y ago
> I don't believe priced, institutional A-round technical due diligence would have turned any of this up I've only done it once but doing a cursory check of the commits and who owns the copyrights etc is pretty fundamental during due diligence.
- tptacek 2y ago
  I'm skeptical. I don't think this "vetting" argument is a real thing. And, again: you're talking about a priced A round, where the legal costs alone are into the six figures. For YC? Come on.
  - threeseed 2y ago
    You're making it sound like this is complicated. It takes minutes to go through a public Git commit history.
    - theptip 2y ago
      It takes minutes to find this specific issue in hindsight. It is laughable to claim that you can do a meaningful audit of a codebase in minutes.
      - rlnvlc 2y ago
        Not in this case.

YetAnotherNick 2y ago

Good technical due diligence from reputed organization costs something like $50-100k. Good legal/accounting due diligence costs the same amount. Which is >20% of what YC invests. Even if 20% are committing clear fraud, it is worth it to pay them. Actual numbers are likely lower.

tempodox 2y ago
I can't help thinking that there has to be something inbetween doing nothing and going all the way.
- DonHopkins 2y ago
  Like sitting down with them for five minutes and talking, to see if they say shit like "dawg I chatgpt'd the license".
  - tptacek 2y ago
    Don, do you honestly think that's a lapse in the process, or are you just joining in to dunk on this random company? You think the YC interview involved licensing questions, and, if it did, that they "dawged" their way through it?
    - DonHopkins 2y ago
      Less about licensing in particular, more about simply not being serious or conscientious about what they're doing. Not just the "dawg" but the following "... we busy building rn can't be bothered with legal". ...or punctuation, capitalization, and grammar, apparently. And what else can't they be bothered with? https://news.ycombinator.com/item?id=41702003 https://news.ycombinator.com/item?id=41702003 elicksaur: Why would you believe anything this person says after that? Default assumption #1 is any writing they output is an LLM product and insincere. Assumption #2 their actions are taken with little thought or intentionality. JohnFen: ... This one line tells me that's an outfit that should be avoided entirely. It's either unfathomable incompetence, or a strong aversion to doing things properly. Either way, it says nothing good. JumpCrisscross: ... The move that dials the dumbassery to eleven is using it as a defence. On Twitter. Like, Exhibit A for any lawsuit that company is ever in will be this tweet: it demonstrates a proud disrespect for law and contracts. That’s high-proof mens rea if I’ve ever seen any. https://x.com/anothercohen/status/1840515897804623882 https://x.com/anothercohen/status/1840515897804623882 Alex Cohen @anothercohen It’s not just the actual legal issues but generally the dismissiveness and sloppiness towards real concerns but I guess good on you all for making the appropriate changes