21–30 of 43 posts
Theory of multiple intelligences suggests, that, when working in the right context, the ability for building strong & profitable businesses does not necessitate the "intelligence" of strong BS-filter. This is why you have a lawyer friend, a strong peer group of entrepreneurs, and that guy full of cynicism, whom you still listen with half an ear. Or if you don't, you should.
There will always be hustlers a-plenty ready to exploit entrepreneurs. A few examples from my years working in Silicon Valley from the legal side (where, unfortunately, a lot of this crops up): In the days when founders were generally less informed than they are today, I would often see them fall prey to "consultants" who would promise to open doors to funding and the like in exchange for a significant equity stake i…
So... why was additional funding needed? Why were the founders not able to get it on their own?
I have seen a young founder build up incredible value in a new venture
How incredible? Maybe the partner believed the founder's estimate to be literally that...
I don't want to defend the company described in the OP, but overconfidence is endemic to the startup culture. There's plenty of companies out there with nothing more than a clever gimmick, or worse yet, an imitation of someone else's clever gimmick, and that are destined to vaporize the carefully collected funds of their investors. Is it wrong to act decisively to turn such companies around? Or to collect whatever "value" remains when the end is nigh?
It's easy to criticize the VC guys, and they certainly can act badly at times, but every entrepreneur thinks their company is the best thing in the world - or acts like they do - and can be a little blind about these things.
There will always be hustlers a-plenty ready to exploit entrepreneurs. A few examples from my years working in Silicon Valley from the legal side (where, unfortunately, a lot of this crops up): In the days when founders were generally less informed than they are today, I would often see them fall prey to "consultants" who would promise to open doors to funding and the like in exchange for a significant equity stake i…
I have seen lower-tier VCs who cared not a whit about their reputations take control, fire the founders and do a 100 to 1 reverse stock split in exchange for modest additional funding So... why was additional funding needed? Why were the founders not able to get it on their own? I have seen a young founder build up incredible value in a new venture How incredible? Maybe the partner believed the founder's estimate to…
Nevertheless, it is their company.
Earlier quoted context omitted.
Confirming it here would probably open him up to just as many potential legal pitfalls.
I'd expect a sly wink of a response that would serve as cover. Something like, "I've seen that website before, but I can't comment on whether they're the ones who contacted me."
Earlier quoted context omitted.
I have seen lower-tier VCs who cared not a whit about their reputations take control, fire the founders and do a 100 to 1 reverse stock split in exchange for modest additional funding So... why was additional funding needed? Why were the founders not able to get it on their own? I have seen a young founder build up incredible value in a new venture How incredible? Maybe the partner believed the founder's estimate to…
> every entrepreneur thinks their company is the best thing in the world Nevertheless, it is their company.
Earlier quoted context omitted.
> every entrepreneur thinks their company is the best thing in the world Nevertheless, it is their company.
After they have received an investment it is not their company, but a company that belongs to both them and their investors. Indeed, unless those investors are individuals, they have a fiduciary responsibility to act when the company is being mismanaged.
There is no good excuse for maximizing your profits by suddenly changing the ownership structure of the company to your direct financial benefit. Doing so is wrong.
I'd be curious who actually gets taken by scams like this. I know 2 kinds of people who own businesses, those who worked their butts off for years building them themselves and those who inherited them from their parents. I've noticed a disproportionate number of the inheritors who have taken family money that took 40 years to amass and have lost it in a year or two. Founders and builders that I know seem to be much m…
Entrepreneurs of all stripes can get taken by scams like this. Often times they are not "scams" per se, just very overpriced services. Like agile programmering groups charging $200/hr and delivering worse code than the in-house teams. I've worked for four boot-strapped-then-venture-funded startups and ALL of the founders at these startups have fallen for something like this at one point. It's pretty easy to fall for…
There will always be hustlers a-plenty ready to exploit entrepreneurs. A few examples from my years working in Silicon Valley from the legal side (where, unfortunately, a lot of this crops up): In the days when founders were generally less informed than they are today, I would often see them fall prey to "consultants" who would promise to open doors to funding and the like in exchange for a significant equity stake i…
Isn't that how facebook re-jiggered things to make up for early equity granting "mistakes?"
There will always be hustlers a-plenty ready to exploit entrepreneurs. A few examples from my years working in Silicon Valley from the legal side (where, unfortunately, a lot of this crops up): In the days when founders were generally less informed than they are today, I would often see them fall prey to "consultants" who would promise to open doors to funding and the like in exchange for a significant equity stake i…
I have seen lower-tier VCs who cared not a whit about their reputations take control, fire the founders and do a 100 to 1 reverse stock split in exchange for modest additional funding So... why was additional funding needed? Why were the founders not able to get it on their own? I have seen a young founder build up incredible value in a new venture How incredible? Maybe the partner believed the founder's estimate to…
The second situation was not only ugly but blatantly illegal and led to a major lawsuit with some pretty serious repercussions for the wrongdoing "partner" (settlement by having to pay a 7-figure sum to the founder plus later getting sued by the acquiring company for various wrongs, including the one described here).