16 ms·

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,

by 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.

by sama 12y ago

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.