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Ask HN: Should I inform investors that my startup employer is a scam?

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Re: Ask HN: Should I inform investors that my startup employer is a scam?

#81

Post by cordialthank »

pkrotich wrote: post #73

Wait - how and what did you get hired for? Did you ask any questions about product and revenue? It seems to me that you went in blindly and now you’re trying to cleanse your conscience. You think the investor didn’t do due diligence? I doubt it - sounds like a money cleaning operation to me! You won’t get anything out of reporting - get the hell out now!

Got hired for a specialized technical role, which turned out they didn't even need. The job description I applied for and got hired for was not related to what I was doing in work. In essence, that was a lie.

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#82

Post by cbzbc »

heassler wrote: post #68
fauigerzigerk wrote: post #62

Earlier quoted context omitted.

>If you see fraud and you don't shout fraud, you are a fraud. No, you are not. Employees do not have an obligation to act purely based on morals without considering the balance of potentially very one-sided legal and financial risks to themselves. These are professional investors with the means and the obligation to do their own due diligence. They don't need individuals making potentially life changing sacrifices in…

I appreciate your points, I think this is an interesting debate. What I mean is that the right thing to do is to call things out if you know they are wrong, even if that involves risk. Assuming that you are absolutely certain that it is indeed a fraud and that the investors are not aware, that is the right and honourable thing to do. Not only that, but looking away is wrong. Think about the hundreds of Theranos emplo…

> Unless you live in China or another poor governance country, whistleblowing is actually encouraged.

Whilst this may be true on paper the practice is rather different. Be aware that a company's lawyers will come after you with as much force of the law that they can muster in this situation

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#83

Post by tnzk »

blitzar wrote: post #28
cordialthank wrote: post #3

Earlier quoted context omitted.

Well this is another discussion. I can do just that separately. But it doesn't seem fair to the employees who stay and believe the company's vaporware of making value and have their equity worth millions in an indefinite future time?

> But it doesn't seem fair to the employees who stay and believe the company's vaporware of making value and have their equity worth millions in an indefinite future time If there is litterally not a single line of code in 10 years and nobody does anything all day but drink kombucha and play foosball then they already know...

why kombucha?

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#84

Post by cordialthank »

vlod wrote: post #74
cordialthank wrote: post #56

Earlier quoted context omitted.

Didn't stress on this point, but CEO is delusional and megalomaniac. They think their plan is going to work and they keep hiring people for stuff that supposedly will build up the SaaS. They are emotionally abusive to dissidents and people who disagree. It's a lost cause. I'm not poorly informed, otherwise I wouldn't be making this post. After everyone left I am in the most senior engineer position (lead) and there w…

Not discounting any of the other "Danger, Will Robinson!" comments, have you considered actually building the crazy thing they want? At the moment, it sounds like you doing BS work and chasing your own tail. It might be more interesting to change your attitude and jump on the delusional train (which a lot of startups are tbh), take the CEO more seriously and start building exactly what they want (or at least start pr…

I wish I could get into details but that'd give away my identity. Unfortunately this isn't possible. I tried it for months but I was sabotaged continuously by management by doing things faster than I was told (yes they actually berated me for being "fast").

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#86

Post by cannaceo »

qikInNdOutReply wrote: post #38

Its a money laundering machine.. the oligarch invest dirty money into it, they buy equipment from other oligarch conglomerate companies, washing the money in the process. Just build your dream project there, and then take it with you. Its basically a mafiosi incubator and the software is decoration and they do not recognize the value of it missing or ever having existed. Could be other things to. Empty houses in the…

Yep. I've seen this model many times in my industry(cannabis). You can coast for a long time in this position. Consider asking to go remote, sit on payroll, and getting another job as well. No harm no foul.

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#87

Post by cannaceo »

triceratops wrote: post #70
qikInNdOutReply wrote: post #38

Its a money laundering machine.. the oligarch invest dirty money into it, they buy equipment from other oligarch conglomerate companies, washing the money in the process. Just build your dream project there, and then take it with you. Its basically a mafiosi incubator and the software is decoration and they do not recognize the value of it missing or ever having existed. Could be other things to. Empty houses in the…

Can you explain? "Money laundering" businesses are cash businesses. If the money is already in the legitimate banking system it doesn't need to be laundered, even if it's from an "oligarch". How does this help? As someone below commented, it seems more likely that the VCs are stealing from their investors.

Laundry isn't always cash. Sometimes you've stolen funds from a government or through a banking scam. That money needs to travel through other businesses to be effectively cleaned.

For example, say you were in charge of a private equity fund with a close overlap of executives with a government bank. When investments go well you put them on the PE funds books. When they go poorly you put them on the bank's books. The bank gets a few government bailouts in the process. You now have billions in dirty funds in your PE fund that need to be laundered through investments. A few additional degrees of separation here can be very useful. I've seen this exact situation play out and met some of these guys while trying to do business in Africa.

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#89

Post by notahacker »

triceratops wrote: post #70
qikInNdOutReply wrote: post #38

Its a money laundering machine.. the oligarch invest dirty money into it, they buy equipment from other oligarch conglomerate companies, washing the money in the process. Just build your dream project there, and then take it with you. Its basically a mafiosi incubator and the software is decoration and they do not recognize the value of it missing or ever having existed. Could be other things to. Empty houses in the…

Can you explain? "Money laundering" businesses are cash businesses. If the money is already in the legitimate banking system it doesn't need to be laundered, even if it's from an "oligarch". How does this help? As someone below commented, it seems more likely that the VCs are stealing from their investors.

I think the "VCs stealing from their investors" hypothesis is quite plausible, but there's plenty of reasons why someone might need to receive payments as 'investment' or 'revenue' rather than unexplained payments from suspicious people, especially if the money is being transferred internationally. Could also be a way of exploiting 'investor' and 'startup' tax breaks and collecting R&D grants whilst doing as little real research as possible (and eventually, having consumed all the cash, writing it all off as losses against tax bills)

And yes, there are also startups which produce only 'tech demos' of potential new business lines because they've accepted the product they were originally going to buy won't work, but their founders aren't ready give up yet, but not easy for them to convince investors to follow along for 5-7 years without revenue even if they're really good liars...

Re: Ask HN: Should I inform investors that my startup employer is a scam?

#90

Post by kjellsbells »

heassler wrote: post #68
fauigerzigerk wrote: post #62

Earlier quoted context omitted.

>If you see fraud and you don't shout fraud, you are a fraud. No, you are not. Employees do not have an obligation to act purely based on morals without considering the balance of potentially very one-sided legal and financial risks to themselves. These are professional investors with the means and the obligation to do their own due diligence. They don't need individuals making potentially life changing sacrifices in…

I appreciate your points, I think this is an interesting debate. What I mean is that the right thing to do is to call things out if you know they are wrong, even if that involves risk. Assuming that you are absolutely certain that it is indeed a fraud and that the investors are not aware, that is the right and honourable thing to do. Not only that, but looking away is wrong. Think about the hundreds of Theranos emplo…

> Assuming that you are absolutely certain that it is indeed a fraud

There's the rub, right there. There will always be a tiny doubt. Especially as a worker bee who doesn't have all the inside facts. People tend to talk themselves out of taking action due to this. The resolution is to document what you know, incontrovertibly, leave all speculation out of it and then hand the problem over to someone else. Which is why tiplines exist at the SEC, DHS, and other agencies where this sort of self-doubt is a serious impediment to reporting of malfeasance.

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