They thought they were joining an accelerator – instead they lost their startups
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Re: They thought they were joining an accelerator – instead they lost their startups
#2This article is absolute trash since it doesn't explain how the bankruptcy of the accelerator would change the amount of dilution the startups experience.
Taking the information in the article at face value, the startups paid the accelerator (partially) with warrants. Those warrants have a fixed exercise price; the courts cannot change that. Whether those warrants are exercised by the accelerator or by the creditors, the dilution will be exactly the same. This is not at all affected by whether creditors bought the warrants for penny on the dollar or for a billion dollars.
Maybe there's some reason why warrant owner matters. But the article makes no attempt to state or even hint at such a reason.
I wish there was a way to blacklist domains from showing up on my Hacker News feed so I don't have to keep reading this type of junk journalism.
Re: They thought they were joining an accelerator – instead they lost their startups
#3Terrifying.
Re: They thought they were joining an accelerator – instead they lost their startups
#4What a psychopath.
To anyone who may be in this kind of situation, trust your instincts and leave. It will not get better. You will find other, better opportunities elsewhere. Best lesson I ever learned was from a high level exec that had just started at the company where I worked. He quit in 2 weeks. Impressively, he did it without drama or really even causing bad will - he just told the CEO it wasn't a match, and that the longer he stayed the more detrimental it would be to both himself and the company. I wish I had followed his lead - I was too worried about what it would look like to leave a company so soon after joining.
Re: They thought they were joining an accelerator – instead they lost their startups
#5This article is absolute trash since it doesn't explain how the bankruptcy of the accelerator would change the amount of dilution the startups experience. Taking the information in the article at face value, the startups paid the accelerator (partially) with warrants. Those warrants have a fixed exercise price; the courts cannot change that. Whether those warrants are exercised by the accelerator or by the creditors,…
Why the diatribe?
> Maybe there's some reason why warrant owner matters.
It's a well understood fact by anyone in the startup world that it does matter, because future investors or acquirers care deeply about the structure of your cap table. Furthermore, the article gives an explicit example of this:
> She had lined up a grant from a bank to help fund her offer, but it ultimately told her no because it was too risky for them to be involved with an unknown warrant holder on her cap table.
Re: They thought they were joining an accelerator – instead they lost their startups
#6Add TechStars to the list of accelerators to be avoided at all costs. They make an investment in your company on terms they can claw back the money at any time. Most of these accelerators provide little to no value, in my experience. Unless you need to know what “product market fit” means. Hilarious.
Re: They thought they were joining an accelerator – instead they lost their startups
#7What a psychopath. To anyone who may be in this kind of situation, trust your instincts and leave . It will not get better. You will find other, better opportunities elsewhere. Best lesson I ever learned was from a high level exec that had just started at the company where I worked. He quit in 2 weeks. Impressively, he did it without drama or really even causing bad will - he just told the CEO it wasn't a match, and…
What was the truth? Really just bad fits or something more sinister?
Re: They thought they were joining an accelerator – instead they lost their startups
#8What a psychopath. To anyone who may be in this kind of situation, trust your instincts and leave . It will not get better. You will find other, better opportunities elsewhere. Best lesson I ever learned was from a high level exec that had just started at the company where I worked. He quit in 2 weeks. Impressively, he did it without drama or really even causing bad will - he just told the CEO it wasn't a match, and…
I once worked at a place where an employee started their first day at the start of the shift. They mumbled their way through it to lunch where they never returned. That's the shortest I've personally seen. Absolutely not a c-suite role or anything management related though.
Re: They thought they were joining an accelerator – instead they lost their startups
#9What a fucking mess.
I got tons and tons of outreach from these guys for my company. It was pretty well written didn’t come off as overtly scammy unless you already know to run screaming from an accelerator or any other “investor” that wants you to give them money up front.
Re: They thought they were joining an accelerator – instead they lost their startups
#10This article is absolute trash since it doesn't explain how the bankruptcy of the accelerator would change the amount of dilution the startups experience. Taking the information in the article at face value, the startups paid the accelerator (partially) with warrants. Those warrants have a fixed exercise price; the courts cannot change that. Whether those warrants are exercised by the accelerator or by the creditors,…
Why the diatribe? > Maybe there's some reason why warrant owner matters. It's a well understood fact by anyone in the startup world that it does matter, because future investors or acquirers care deeply about the structure of your cap table. Furthermore, the article gives an explicit example of this: > She had lined up a grant from a bank to help fund her offer, but it ultimately told her no because it was too risky…
That paragraph makes no sense.
A bank is offering her a grant?
And this grant was supposed to remove the warrant holder from the cap table, so why would they have a problem with that?
And having some unknown warrant holder is the reason to shut down?
I call BS.