This has been written about on RWW now:
How to Burn Bridges with Bootup Labs and Other Investors
http://www.readwriteweb.com/start/2010/04/how-to-burn-bridge...
Booted out of Bootup Labs
81–90 of 170 posts
Re: Booted out of Bootup Labs
#82Earlier quoted context omitted.
> $50k/startup management fee What?!
Bootup Labs is structured as an investment plus a services contract. They give you $50k in exchange for 5% equity, then you immediately pay the $50k back to them in exchange for the office space, accounting services, legal services, mentoring, et cetera. Then they give you a $100k line of credit which converts (at their option) at 1% equity per $10k. It's a very effective way of protecting themselves from downside ri…
So would that imply that the founders could try to collect part of the $50k from Bootup Labs? It sounded like when they got kicked out of the program, Bootup Labs only covered the previous months rent, when Statusly should have already paid for rent and services for the entire length of the program.
Now if Statusly was only in the program for 2 out of the 8 months, then it seems like the founders could be owed around $35k (50k2/8.95) for the money that they paid to be in the program for the rest of the 6 months.
Re: Booted out of Bootup Labs
#83I shouldn't have said that Bootup Labs had "no money" - I should have put "no money for us." I'm not trying to suggest that Bootup Labs is bankrupt or anything, I apologize.
That makes it so much worse. If they were bankrupt, they would have had no choice but to send you packing. To break their promise to you to raise additional capital is a super-dick move and I hope that future startup founders don't make the mistake you did. Thank you for warning the community.
Re: Booted out of Bootup Labs
#84Earlier quoted context omitted.
Bootup Labs is structured as an investment plus a services contract. They give you $50k in exchange for 5% equity, then you immediately pay the $50k back to them in exchange for the office space, accounting services, legal services, mentoring, et cetera. Then they give you a $100k line of credit which converts (at their option) at 1% equity per $10k. It's a very effective way of protecting themselves from downside ri…
So would that imply that the founders could try to collect part of the $50k from Bootup Labs? It sounded like when they got kicked out of the program, Bootup Labs only covered the previous months rent, when Statusly should have already paid for rent and services for the entire length of the program. Now if Statusly was only in the program for 2 out of the 8 months, then it seems like the founders could be owed around…
I would assume that Statusly never paid Bootup Labs the $50k, due to Bootup Labs never giving them the $50k to give back.
Re: Booted out of Bootup Labs
#85More on Vancouver's Techvibes.com... http://www.techvibes.com/blog/bootup-labs-20-now-with-more-m...
But now with Boris Wertz on board, new funding secured, and the spotlight of this story, there is no doubt that due diligence on all sides will improve and the next cohort of startups will be better than ever. Hmm, ok. Disclosure: Boris Wertz is an investor in Techvibes Media Inc. Surprise, surprise.
Surprise, surprise.
I doubt Boris Wertz pulled any strings to get the positive spin from Techvibes -- my impression is that Techvibes would find a way to give a positive spin to "meteor headed for Vancouver, is expected to destroy city".
Re: Booted out of Bootup Labs
#86Earlier quoted context omitted.
Bootup Labs is structured as an investment plus a services contract. They give you $50k in exchange for 5% equity, then you immediately pay the $50k back to them in exchange for the office space, accounting services, legal services, mentoring, et cetera. Then they give you a $100k line of credit which converts (at their option) at 1% equity per $10k. It's a very effective way of protecting themselves from downside ri…
So would that imply that the founders could try to collect part of the $50k from Bootup Labs? It sounded like when they got kicked out of the program, Bootup Labs only covered the previous months rent, when Statusly should have already paid for rent and services for the entire length of the program. Now if Statusly was only in the program for 2 out of the 8 months, then it seems like the founders could be owed around…
You guys are getting confused with the "rent" word. We paid Statuslys out of pocket expenses (i.e. their apartment and food) because they had no money.
Re: Booted out of Bootup Labs
#87This has been written about on RWW now: How to Burn Bridges with Bootup Labs and Other Investors http://www.readwriteweb.com/start/2010/04/how-to-burn-bridge...
With a heavy hitting roster like this, it's hard to believe that a startup might bite the hand that feeds it (or at least used to feed it).
Sounds more like the hand that called the dog over with promises of bacon that wasn't there...
Re: Booted out of Bootup Labs
#88Can I just say that the fact that either party here is duking this out in a public forum is just..... unprofessional? Especially from the VC firm itself? I suppose I'm a newcomer to this "VC/incubator/startup" community - but in any other life situation, when I decide to pack up and move somewhere far away, I make sure I have stuff in writing, and cash in the bank, and all my i's dotted and t's crossed before I quit…
One problem is that to create something that's never been done before, and devote the required amount of resources to give it a passing shot at success, requires a certain level of naivete and hubris -- the exact qualities that good investors suppress. So for investors to take advantage of naive entrepreneurs by failing to give full disclosure up front and failing to "do unto them as you'd have others do unto you" is an especially sour pill. Think Grapes of Wrath: it's all just business until the lives of ordinary people are ruined.
Re: Booted out of Bootup Labs
#89Earlier quoted context omitted.
> On behalf of Canadians in general and Vancouverites especially: We're really sorry about this. Allow me to note something. As a Canadian and a Vancouverite. While I do not particularly like Bootup Labs for a variety of reasons, I cannot say that I believe either side of the story and that I can form an objective opinion. For this reason I find it strange that you take it on yourself to apologize on my behalf.
As a Canadian, I'm sure you realize that we apologize for everything, whether it's our fault or not. :-) But aside from that -- even from what Bootup Labs is saying, this situation is very unfortunate for the status.ly founders and something I hope nobody else has to go through.
As a Canadian, I'm sure you realize that we apologize for everything, whether it's our fault or not.
And this is a hang over from your British heritage.
Sorry about that. :-)
Re: Booted out of Bootup Labs
#90Acquisition, investment or acceptance into an incubator are all great things but don't build your startup in such a way that success is dependant upon them. Ultimately, your success will depend on one thing - you. Build your business for profitably and don't count on money until it's safely cleared in your account.
i wish I could upvote this sentiment more. I've also been accepted into an incubator, but had I been declined, I still would of moved forward with release, and marketing plan. After being accepted, I've adjusted my schedule some, but still on track regardless. To me it seems that Jamie is giving up on something that if he truly believed in it, he should continue even now after finding a real job and getting back on his feet. For this reason, it makes me feel that maybe Bootup made the right decision. Regardless its a terrible situation for everyone involved.