7 ms·

The curious cat in me is wondering, "Did something in particular prompt this post?"

by mikeleeorg 12y ago

pyb 12y ago
It looks like YC's answer to the Zidisha situation.
balls187 12y ago
Definitely or is this a solution in search of a problem?
sama 12y ago
Nothing in particular. But as we grow, I think it's important we're clear about our expectations. Because the amounts are small and we fund so many companies, we don't do much diligence before investing. So occasionally we'll fund someone bad. We've had problems in the past, but only twice that I know of. We have now funded more than 700 companies, so that seems remarkably low.
- joshu 12y ago
  I would like to see "keeping investors informed" as part of the honesty thing. I've had a few YC founders dissapear without so much as a "we're shutting down."
  - rdl 12y ago
    Fold that into the "spend money for the unique benefit of the company"? A lot of these really fall into "fiduciary responsibility", but a more 20-year-old accessible statement of that would be ideal.
    - joshu 12y ago
      I don't think anyone absconded with anything. The company legitimately gave up the ghost. An email explaining it and then shutting down the company so I can take my losses would be nice, though.
- amirmc 12y ago
  That is surprisingly low given the number of YC founders there are now. Paraphrasing something I heard from a (somewhat retired) CEO is that beyond a certain size, you're going to end up with problem employees in some proportion to the world at large. i.e the one with a possible alcohol problem, the one who is abusive, the one with odd compulsive behaviours and all manner of other predilections you were unprepared for. The first time you have to deal with this is a bit of a shock but you eventually realise that it's just reflection of humanity at large.
- thinkcomp 12y ago
  Sam, As a former Green Dot VP, you're no doubt familiar with the money transmission legal problem (http://www.regulations.gov/contentStreamer?objectId=090000648156588b&disposition=attachment&contentType=pdf http://www.regulations.gov/contentStreamer?objectId=09000064...). Do you think it is ethical for Y Combinator, its portfolio companies, or its founders to violate state and federal laws simply because they're poorly enforced? Is it ethical for those companies to quietly hire, as contractors or employees, former regulators to "guide" them through the regulatory process? What about overseas tax havens? Does Y Combinator have a policy on the ethics of that issue? Also, there were more than two Y Combinator portfolio companies named as defendants in the federal lawsuit over money transmission (http://www.plainsite.org/dockets/t6maunfo/california-northern-district-court/think-computer-corporation-v-dwolla-inc-et-al/ http://www.plainsite.org/dockets/t6maunfo/california-norther...), so how are you defining "problems?" Are federal lawsuits alleging unlawful and immoral wrongdoing not "problematic?" What about shell corporations? Does Y Combinator have any connection to Payments Sub, Inc., the company that Airbnb's CFO formed after being sued to obtain a money transmission license in California? Regardless, wouldn't the most ethical thing to do in the face of a confusing legal situation involve public lobbying for reform of the laws at issue, rather than exploitation of the chaos? Why has Y Combinator consistently opted for the latter, rather than the former? Aaron
  - tlrobinson 12y ago
    Speaking of ethics, I think you mean: "Also, there were more than two Y Combinator portfolio companies named as defendants in my federal lawsuit over money transmission"
    - thinkcomp 12y ago
      Hi Tom, What's the ethical problem here exactly? I linked to the lawsuit docket, it's clear that my company filed it, and it doesn't matter either way in the context of my argument. Furthermore, had I written "my" as you suggest, it would make it sound like there is a potential ethical problem because I say so. But my point isn't that there is a potential ethical problem because I say so. My point is that there is a potential ethical problem when lawsuits in general start getting filed. Aaron
- jacquesm 12y ago
  > We've had problems in the past, but only twice that I know of. Possibly more than just two, but kudos for establishing these anyway. And yes, it is remarkably low.
deleted 12y ago
[deleted]
nymph 12y ago
More likely it was an aggregation of events that prompted it. It's amazing the extent to which (what should be) self-evident principles such as this whole "fairness and respect" thing, "honoring handshake deals", and "generally behaving in an upstanding way (even though it may be convenient or profitable for you not to)" seem to be beyond the cognitive grasp of certain "founders" I know.
- Matt_Mickiewicz 12y ago
  Thumbs up. I've heard about a few instances of the past year of startup founders treating their employees really badly... from lying about work hour expectations, to the details of the day to day job in order to get someone to sign on the dotted line. Even firing people, without cause, within days of them starting.
  - nymph 12y ago
    What do you mean, "without cause"? There are plenty of good reasons for firing people just after you've hired them: "We really appreciate your strong backend skills (especially being as we're still trying to figure out like, namespaces and stuff). But we just found this frontend guy who's really hawt! And we can't afford him unless we fire you." "It's not a culture fit." "It's just not working out." etc.
    - npizzolato 12y ago
      Being fired for "not being a culture fit" within days of being hired sounds reasonable to you? Especially after what was most likely a rather involved interview process?
      - saryant 12y ago
        I think he was being sarcastic.
        npizzolato 12y ago

The curious cat in me is wondering, "Did something in particular prompt this post?"

pyb 12y ago

It looks like YC's answer to the Zidisha situation.

balls187 12y ago

Definitely or is this a solution in search of a problem?

sama 12y ago

Nothing in particular. But as we grow, I think it's important we're clear about our expectations. Because the amounts are small and we fund so many companies, we don't do much diligence before investing. So occasionally we'll fund someone bad. We've had problems in the past, but only twice that I know of. We have now funded more than 700 companies, so that seems remarkably low.

joshu 12y ago
I would like to see "keeping investors informed" as part of the honesty thing. I've had a few YC founders dissapear without so much as a "we're shutting down."
- rdl 12y ago
  Fold that into the "spend money for the unique benefit of the company"? A lot of these really fall into "fiduciary responsibility", but a more 20-year-old accessible statement of that would be ideal.
  - joshu 12y ago
    I don't think anyone absconded with anything. The company legitimately gave up the ghost. An email explaining it and then shutting down the company so I can take my losses would be nice, though.
amirmc 12y ago
That is surprisingly low given the number of YC founders there are now. Paraphrasing something I heard from a (somewhat retired) CEO is that beyond a certain size, you're going to end up with problem employees in some proportion to the world at large. i.e the one with a possible alcohol problem, the one who is abusive, the one with odd compulsive behaviours and all manner of other predilections you were unprepared for. The first time you have to deal with this is a bit of a shock but you eventually realise that it's just reflection of humanity at large.
thinkcomp 12y ago
Sam, As a former Green Dot VP, you're no doubt familiar with the money transmission legal problem (http://www.regulations.gov/contentStreamer?objectId=090000648156588b&disposition=attachment&contentType=pdf http://www.regulations.gov/contentStreamer?objectId=09000064...). Do you think it is ethical for Y Combinator, its portfolio companies, or its founders to violate state and federal laws simply because they're poorly enforced? Is it ethical for those companies to quietly hire, as contractors or employees, former regulators to "guide" them through the regulatory process? What about overseas tax havens? Does Y Combinator have a policy on the ethics of that issue? Also, there were more than two Y Combinator portfolio companies named as defendants in the federal lawsuit over money transmission (http://www.plainsite.org/dockets/t6maunfo/california-northern-district-court/think-computer-corporation-v-dwolla-inc-et-al/ http://www.plainsite.org/dockets/t6maunfo/california-norther...), so how are you defining "problems?" Are federal lawsuits alleging unlawful and immoral wrongdoing not "problematic?" What about shell corporations? Does Y Combinator have any connection to Payments Sub, Inc., the company that Airbnb's CFO formed after being sued to obtain a money transmission license in California? Regardless, wouldn't the most ethical thing to do in the face of a confusing legal situation involve public lobbying for reform of the laws at issue, rather than exploitation of the chaos? Why has Y Combinator consistently opted for the latter, rather than the former? Aaron
- tlrobinson 12y ago
  Speaking of ethics, I think you mean: "Also, there were more than two Y Combinator portfolio companies named as defendants in my federal lawsuit over money transmission"
  - thinkcomp 12y ago
    Hi Tom, What's the ethical problem here exactly? I linked to the lawsuit docket, it's clear that my company filed it, and it doesn't matter either way in the context of my argument. Furthermore, had I written "my" as you suggest, it would make it sound like there is a potential ethical problem because I say so. But my point isn't that there is a potential ethical problem because I say so. My point is that there is a potential ethical problem when lawsuits in general start getting filed. Aaron
jacquesm 12y ago
> We've had problems in the past, but only twice that I know of. Possibly more than just two, but kudos for establishing these anyway. And yes, it is remarkably low.

deleted 12y ago

[deleted]

nymph 12y ago

More likely it was an aggregation of events that prompted it. It's amazing the extent to which (what should be) self-evident principles such as this whole "fairness and respect" thing, "honoring handshake deals", and "generally behaving in an upstanding way (even though it may be convenient or profitable for you not to)" seem to be beyond the cognitive grasp of certain "founders" I know.

Matt_Mickiewicz 12y ago
Thumbs up. I've heard about a few instances of the past year of startup founders treating their employees really badly... from lying about work hour expectations, to the details of the day to day job in order to get someone to sign on the dotted line. Even firing people, without cause, within days of them starting.
- nymph 12y ago
  What do you mean, "without cause"? There are plenty of good reasons for firing people just after you've hired them: "We really appreciate your strong backend skills (especially being as we're still trying to figure out like, namespaces and stuff). But we just found this frontend guy who's really hawt! And we can't afford him unless we fire you." "It's not a culture fit." "It's just not working out." etc.
  - npizzolato 12y ago
    Being fired for "not being a culture fit" within days of being hired sounds reasonable to you? Especially after what was most likely a rather involved interview process?
    - saryant 12y ago
      I think he was being sarcastic.
      - npizzolato 12y ago