“Startup Robs Every Customer They Have for Thousands of Dollars Overnight”

They have 3 investors in the first and only round: https://www.crunchbase.com/organization/homeshare#section-in...

In general, I understand and support the idea that, should your startup not go well, you fail, wrap things up, and move on. It's too big of a risk to stake your entire life on one venture, and my understanding is that VC firms, angels, and the like all understand that this can happen when they invest in a startup.

That risk is not something that is understood by most end users, where in this case "end users" includes landlords and other people "on the ground". Those people made an agreement with the startup in good faith, and I contend that faith has been violated, to the potential financial ruination of (at least) a subset of the tenants, and possibly (depending on their financial position) a fair subset of the landlords.

(It's worth noting the Reddit post was made about a day ago. In my rental agreement, for example, I would now be in violation for failing to pay rent to the landlord. I expect many of the tenants are now in that same position.)

I contend that you should not be allowing things like this to be precipitated.

Yes, I'm looking at you, YC. Yes, I'm looking at you, A16Z. And all of the other VC organizations, _and their alumni networks_. With this case serving as an example, I think you have a self-policing problem.

You might say something along the lines of "Oh, it [the startup] wasn't affiliated with any of us", or "Oh, that 'VC' isn't an actual VC", or "Oh, we didn't know them". In an instance like this, I don't think that matters. What matters is two things:

1. If not illegal, I contend that the actions of the startup (and maybe the VC) were at least highly immoral.

2. From the landlord's perspective, they see this as a startup and a VC. Maybe that's not what they actually were, but that doesn't matter. For this point, it doesn't matter what the reality was, it matters what the perception _is_.

I suggest two actions:

1. You (the same collective 'you' as above) should immediately reach out to the poster, to learn both about their tenants and to get in contact with the representative that the landlord was working with. You should then use that contact to identify other landlords where this has happened. Make the tenants whole through at least April, if not April and May.

2. Create a framework to prevent things like this from happening. I admit that I'm being _way_ to vague here, but that is because I do not have enough expertise in what you do, to make a concrete suggestion. Instead, I am calling out the problem, so that you can use your knowledge and experience to formulate a solution. For example, many of you have talked about—or otherwise targeted—basic income. Why not tackle this first.

At least in California, no. My experience has always been the landlord makes up any excuse at all to keep the deposit and you fight them tooth and nail. California does have a fair number of renter protection laws, but the companies rarely observe them.

Like a lot of such mechanisms this does have a flaw that it's not really useful for the most vulnerable people. When someone like me gets screwed by a landlord (back before I bought somewhere outright) they can invoke the protection mechanism and even threaten to go to court, but when somebody who struggles every month to find rent gets screwed this way they're focused on how they'll afford food, they don't have the time or money to fight.

Historically a lot of those people rented from their local government and so not mistreating them was a matter of government policy, subject to oversight by voters like me who certainly do have time and money. But these days it's likely to be whoever has the cheapest private rent offers. Local governments have been defunded so much they may not even have anybody left to even enforce licensing rules, so crooks who shouldn't even legally be letting properties can steal with impunity.

Courts try to help. If you get to court. But most of these vulnerable people never will.

Judging by the last couple sentences, I think they’re posting on behalf of the residents, who wouldn’t get much help from the company.