6 ms·

As internal counsel for YC, it was very upsetting to learn about the ongoing troubles at Amicus. It was particularly distressing to hear about the payroll tax i

by jlevy 12y ago

As internal counsel for YC, it was very upsetting to learn about the ongoing troubles at Amicus. It was particularly distressing to hear about the payroll tax issues, given that YC has funded excellent companies that specialize in accounting and payroll for small businesses, such as Indinero and Zenpayroll. The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality. For example, in paragraph 3 Seth writes that PG looks for founders that are "naughty" and writes about levels of rule-breaking. YC's principal tenets are to "make something people want" and "talk and listen to users/customers" -- YC may promote a culture of disruption, but that does not mean neglecting payroll taxes and breaking rules.

davindra 12y ago
> "The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality." That's interesting to know. So when a founder makes a mistake that unintentionally breaks a law, YC ceases their support.
sethbannon 12y ago
As tlrobinson and jacquesm noted, I certainly didn't mean to imply that YC in any way supports companies not paying payroll taxes -- as I advise in the post, companies shouldn't cut corners when it comes to that stuff.
- jasonlaramburu 12y ago
  It's ironic to me that payroll taxes (which theoretically exist for the employee's benefit) have forced a promising and growing company to lay off staff. Have you tried hiring a tax attorney to negotiate with the IRS? Often they will waive some of the penalties and allow payment plans.
jacquesm 12y ago
Thank you for this note, good to see YCs position on stuff like this. But to clarify the point the OP made about being 'naughty' had to do with a different part of the narrative, the one where promises were made to customers, not the part where they do not pay the withheld payroll taxes (the illegal component).
- calibraxis 12y ago
  That's YC's public-facing position, almost certainly not its real position. Virtually every corporation I know regularly lies. Structurally. This is because speech is an act, and they pursue actions which maximize profit (and/or marketshare); and deal with competitors who have the same basic incentives. If they didn't lie, they'd often be replaced by those who do.
  - jacquesm 12y ago
    I'm not exactly in the YC alumni camp (even though I know plenty of them) and I think that you're way off base here. YC has made a couple of such statements in the past and from what I've seen they stand by them both in further communications and in actions. I recall PGs writings about installmonetizer as one example, and a few others which I won't be repeating here to avoid tearing open old wounds. In general, of all the start-up accelerators out there YC is by far the most transparent about what kind of behavior they are proud to be associated with and what kind of behavior is definitely un-acceptable and they are not afraid of making that known, to past, present and future YC alumni alike. If you don't believe me read: http://www.ycombinator.com/ethics/ http://www.ycombinator.com/ethics/ And then come up with instances where YC has continued to back a company that violated those rules willingly. The OP is by his own admission clearly in violation of a whole bunch of those and has a number of very hard choices to make (resignation being one option).
    - calibraxis 12y ago
      Fine; you think I'm off base, but that's not my problem. :) Contrast your emphasis on a couple statements for PUBLIC consumption, vs. the article's claim: "One of the big values of Y Combinator was that we were able to hear strictly off-the-record stories of many successful startups' WFIO [‘We’re Fucked, It’s Over’] moments." In any case, many of us have been inside corporations, and observed the clear dynamics.
tlrobinson 12y ago
"The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality." FWIW I didn't get that impression from the post. Here's what I assume he was referring to: "4. Naughtiness Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination." http://www.paulgraham.com/founders.html http://www.paulgraham.com/founders.html I think not paying taxes would obviously fall in the "rules that matter" category.
- deleted 12y ago
  [deleted]
nyc_str8tsh00t 12y ago
Good to see YC step forward on this. I'm not a HN regular, but I've been following this thread all day because I have a friend who worked at Amicus, and several others who have worked with their software. I know there are always many sides to any story. I wasn't there, just like most of you weren't there, but all I can say is Seth's version of this story does NOT fit with what I've heard, and everything I've heard has been from honest, cool people who - unlike Seth - don't have a history of lying about really important shit. Seth absolutely deserves to have a forum to tell his version of the story, but I find it more than a little annoying that after everything he's done, he's still able to leverage his position as a YC Founder to ensure that his version of the story gets more attention than anyone else's. Based on everything I've heard, I'd say this post is essentially about admitting to lesser crimes so the world forgives him before we even know what he really did or did not do. I'd urge the media powers that be to try and get some former employees, investors,customers, etc., on the record. And if they don't, then all of us should probably just move along and forget about this guy. Sounds like he already duped a lot of people into believing in him - I for one don't intend to be his next victim.
- lambda 12y ago
  I'm curious; what have you heard that makes these sound like lesser crimes? I feel like from my reading of this, it sounds like he's admitting to being pretty dishonest in a lot of ways (though obviously weasel-worded), so I'm curious what more we're not hearing about; if this is supposed to make him look better, then whatever's left must be pretty bad!
  - nyc_str8tsh00t 12y ago
    I don't want to spread rumors, and everything I've heard has been second hand at best. I just know that there were a lot of good people at Amicus, and a lot of good organizations relying on the software, and now they are all screwed.
- jon2512chua 12y ago
  > Seth absolutely deserves to have a forum to tell his version of the story, but I find it more than a little annoying that after everything he's done, he's still able to leverage his position as a YC Founder to ensure that his version of the story gets more attention than anyone else's. I'm really interested to hear about the other side of the story. Any links?
megablast 12y ago
The naughtiness he is referring to is clearly not the mistake they made in not paying payroll tax. He mentions later that it is about offering features that did not exist yet, which is very common.
pygy_ 12y ago
I think that you misunderstood his post (even though you may have more information than I do). The end note is indeed ambiguous, but the body of the post of the post is more detailed and I had understood that he was talking about the alumni rather than YC itself. I’ve been most surprised by the outpouring of support from other entrepreneurs (mainly from the Y Combinator network) who heard we might be going through tough times, and reached out just to let me know they were there for me. Besides that, the he mentions YC and pg as inspiration, throughout the post, but there's no mention of an active support. What more, he claims that the taxes issue was an oversight rather than an willful decision. It is thus irresponsibility rather than naughtiness, which requires intentionality. Also he doesn't try to justify it as pg-defined naughty behavior.
- jlevy 12y ago
  I am happy that you think I misunderstood his post (and yes I have more information than many about the situation). When I read the post I thought it was implicit that YC supported Seth fully. That is not the case. There are mentions of YC throughout the post, and a couple of references to the YC network. I was hoping to clarify that the YC network doesn't automatically include YC. My one example may have been misconstrued and there are many parts and sides to this story. As long as it is clear that there is not unconditional support at YC for Seth's handling of the situation, then that is all that matters.
lifeisstillgood 12y ago
This I find hard. This thread is a major eye-opener, quite heavily dividing the HN world. No one thinks Seth/Amicus did well here, but there is a world of difference between supporting a company or founder and condoning illegality. This smacks of hanging someone out to dry. And that bothers me, unless you have much more backstory with Amicus than is obvious here. This thread has shaken me - I initially sided with OP because he sounded a great deal like me - and I respected the effort such honesty takes. I am not sadly a man of great personal integrity. I vow never to lie but only because I have found it leads to more stress and trouble than the alternative. Always being honest I am working up to - ChuckM's grandfather sets a high bar. Ultimately I have no insight into this case, no idea who's story is more close to reality. But I value openness and admitting of mistakes - it makes my own stumblings more bearable. So I respect Seth for opening up here. He may well lose this company, he may well suffer prosecution for back taxes. And he should take his licks. But if he has dealt openly and honestly with his investors and employees he will I expect be back again, backed by investors who will this time insist on a firm of good accountants Incompetency in administration may be a crime, but it's more forgivable than lying.
infoseckid 12y ago
You could have at least called the founder and asked what he meant, instead of bashing him here. You could have asked him to add more clarification in his blog which might have ensured that what your pointing to is not implied. You guys are growing and its important to scale your communication as well.

by jlevy 12y ago

davindra 12y ago

> "The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality." That's interesting to know. So when a founder makes a mistake that unintentionally breaks a law, YC ceases their support.

sethbannon 12y ago

As tlrobinson and jacquesm noted, I certainly didn't mean to imply that YC in any way supports companies not paying payroll taxes -- as I advise in the post, companies shouldn't cut corners when it comes to that stuff.

jasonlaramburu 12y ago
It's ironic to me that payroll taxes (which theoretically exist for the employee's benefit) have forced a promising and growing company to lay off staff. Have you tried hiring a tax attorney to negotiate with the IRS? Often they will waive some of the penalties and allow payment plans.

jacquesm 12y ago

Thank you for this note, good to see YCs position on stuff like this. But to clarify the point the OP made about being 'naughty' had to do with a different part of the narrative, the one where promises were made to customers, not the part where they do not pay the withheld payroll taxes (the illegal component).

calibraxis 12y ago
That's YC's public-facing position, almost certainly not its real position. Virtually every corporation I know regularly lies. Structurally. This is because speech is an act, and they pursue actions which maximize profit (and/or marketshare); and deal with competitors who have the same basic incentives. If they didn't lie, they'd often be replaced by those who do.
- jacquesm 12y ago
  I'm not exactly in the YC alumni camp (even though I know plenty of them) and I think that you're way off base here. YC has made a couple of such statements in the past and from what I've seen they stand by them both in further communications and in actions. I recall PGs writings about installmonetizer as one example, and a few others which I won't be repeating here to avoid tearing open old wounds. In general, of all the start-up accelerators out there YC is by far the most transparent about what kind of behavior they are proud to be associated with and what kind of behavior is definitely un-acceptable and they are not afraid of making that known, to past, present and future YC alumni alike. If you don't believe me read: http://www.ycombinator.com/ethics/ http://www.ycombinator.com/ethics/ And then come up with instances where YC has continued to back a company that violated those rules willingly. The OP is by his own admission clearly in violation of a whole bunch of those and has a number of very hard choices to make (resignation being one option).
  - calibraxis 12y ago
    Fine; you think I'm off base, but that's not my problem. :) Contrast your emphasis on a couple statements for PUBLIC consumption, vs. the article's claim: "One of the big values of Y Combinator was that we were able to hear strictly off-the-record stories of many successful startups' WFIO [‘We’re Fucked, It’s Over’] moments." In any case, many of us have been inside corporations, and observed the clear dynamics.

tlrobinson 12y ago

"The tone of Seth's post suggest that YC has supported Seth in all of his recent actions. That is not true -- YC supports its companies through good times and bad, but we do not support illegality." FWIW I didn't get that impression from the post. Here's what I assume he was referring to: "4. Naughtiness Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination." http://www.paulgraham.com/founders.html http://www.paulgraham.com/founders.html I think not paying taxes would obviously fall in the "rules that matter" category.

deleted 12y ago
[deleted]

nyc_str8tsh00t 12y ago

Good to see YC step forward on this. I'm not a HN regular, but I've been following this thread all day because I have a friend who worked at Amicus, and several others who have worked with their software. I know there are always many sides to any story. I wasn't there, just like most of you weren't there, but all I can say is Seth's version of this story does NOT fit with what I've heard, and everything I've heard has been from honest, cool people who - unlike Seth - don't have a history of lying about really important shit. Seth absolutely deserves to have a forum to tell his version of the story, but I find it more than a little annoying that after everything he's done, he's still able to leverage his position as a YC Founder to ensure that his version of the story gets more attention than anyone else's. Based on everything I've heard, I'd say this post is essentially about admitting to lesser crimes so the world forgives him before we even know what he really did or did not do. I'd urge the media powers that be to try and get some former employees, investors,customers, etc., on the record. And if they don't, then all of us should probably just move along and forget about this guy. Sounds like he already duped a lot of people into believing in him - I for one don't intend to be his next victim.

lambda 12y ago
I'm curious; what have you heard that makes these sound like lesser crimes? I feel like from my reading of this, it sounds like he's admitting to being pretty dishonest in a lot of ways (though obviously weasel-worded), so I'm curious what more we're not hearing about; if this is supposed to make him look better, then whatever's left must be pretty bad!
- nyc_str8tsh00t 12y ago
  I don't want to spread rumors, and everything I've heard has been second hand at best. I just know that there were a lot of good people at Amicus, and a lot of good organizations relying on the software, and now they are all screwed.
jon2512chua 12y ago
> Seth absolutely deserves to have a forum to tell his version of the story, but I find it more than a little annoying that after everything he's done, he's still able to leverage his position as a YC Founder to ensure that his version of the story gets more attention than anyone else's. I'm really interested to hear about the other side of the story. Any links?

megablast 12y ago

The naughtiness he is referring to is clearly not the mistake they made in not paying payroll tax. He mentions later that it is about offering features that did not exist yet, which is very common.

pygy_ 12y ago

I think that you misunderstood his post (even though you may have more information than I do). The end note is indeed ambiguous, but the body of the post of the post is more detailed and I had understood that he was talking about the alumni rather than YC itself. I’ve been most surprised by the outpouring of support from other entrepreneurs (mainly from the Y Combinator network) who heard we might be going through tough times, and reached out just to let me know they were there for me. Besides that, the he mentions YC and pg as inspiration, throughout the post, but there's no mention of an active support. What more, he claims that the taxes issue was an oversight rather than an willful decision. It is thus irresponsibility rather than naughtiness, which requires intentionality. Also he doesn't try to justify it as pg-defined naughty behavior.

jlevy 12y ago
I am happy that you think I misunderstood his post (and yes I have more information than many about the situation). When I read the post I thought it was implicit that YC supported Seth fully. That is not the case. There are mentions of YC throughout the post, and a couple of references to the YC network. I was hoping to clarify that the YC network doesn't automatically include YC. My one example may have been misconstrued and there are many parts and sides to this story. As long as it is clear that there is not unconditional support at YC for Seth's handling of the situation, then that is all that matters.

lifeisstillgood 12y ago

This I find hard. This thread is a major eye-opener, quite heavily dividing the HN world. No one thinks Seth/Amicus did well here, but there is a world of difference between supporting a company or founder and condoning illegality. This smacks of hanging someone out to dry. And that bothers me, unless you have much more backstory with Amicus than is obvious here. This thread has shaken me - I initially sided with OP because he sounded a great deal like me - and I respected the effort such honesty takes. I am not sadly a man of great personal integrity. I vow never to lie but only because I have found it leads to more stress and trouble than the alternative. Always being honest I am working up to - ChuckM's grandfather sets a high bar. Ultimately I have no insight into this case, no idea who's story is more close to reality. But I value openness and admitting of mistakes - it makes my own stumblings more bearable. So I respect Seth for opening up here. He may well lose this company, he may well suffer prosecution for back taxes. And he should take his licks. But if he has dealt openly and honestly with his investors and employees he will I expect be back again, backed by investors who will this time insist on a firm of good accountants Incompetency in administration may be a crime, but it's more forgivable than lying.

infoseckid 12y ago

You could have at least called the founder and asked what he meant, instead of bashing him here. You could have asked him to add more clarification in his blog which might have ensured that what your pointing to is not implied. You guys are growing and its important to scale your communication as well.