When is the auction? How can you bid?
They thought they were joining an accelerator – instead they lost their startups
81–90 of 167 posts
Re: They thought they were joining an accelerator – instead they lost their startups
#82What 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…
Execs can have bigger voids due to gardening leave, non competes so it looks OK. But honestly because you can (in theory) lie on your CV it ain’t worth worrying about. So the scenario where you die because you run out of money and need a job because of a gap can be remediated that way. Change the dates or something.
Re: They thought they were joining an accelerator – instead they lost their startups
#83Earlier quoted context omitted.
No one gives away 20% of a company for advice. He gives them capital. Hopefully connections. And founders can take or leave the advice. Anyway, he is a successful entrepreneur having built AngelList. Sure, maybe he isn’t Midas, but a single failure in a startup doesn’t make someone an idiot. But assuming you are referring to AirChat, it seems too early to call it a failure anyway.
>No one gives away 20% of a company for advice. You'd be surprised at how common that is. Wouldn't you be inclined to believe that @naval wouldn't want to use that capital, connections and whatnot to support the single project of its own authorship in its lifetime? The results speak for themselves. I have another theory, VCs freeride on the success and luck of other people's projects, which (sometimes) are so good an…
This is kind of a confusing perspective considering VCs are giving you money to pay for the operations of your business. Money is money no matter how stupid the giver is, their money won’t leech value from your company itself.
As for founders ending up with nothing, in those cases their investors ended up with much much less than they were hoping to too. Plus there’s plenty of other cases where founders get rich off a worthless company because of the beneficence of VCs.
Re: They thought they were joining an accelerator – instead they lost their startups
#84The court has since ordered the company to auction off the warrants it held in more than 1,000 of the startups that went through the accelerator program.
Why should the startups be punished? I think in this case the interests of startup ecosystem should out do those of creditors. Is there no protection for that?? Seems nond to gut startups when an accelerator failed, agains the entire purpose.
Seems a great way to destroy economic value. Tho to be brutal a bag of startups is basically economic destruction anyway, on average as most of them fail...but I mean. In this case it's like precrime, they're killing them before they even have a chance. Not fair, not good!
Re: They thought they were joining an accelerator – instead they lost their startups
#85> So she paid a $7,500 deposit and was all set to join Newchip when a founder friend told her to “never pay for introductions.” Hopefully everyone knows this here, but if you paid for an introduction it's a negative signal: just cold email. That being said, I'll make intros for only $6,500 and no warrants.
Don't listen to this charlatan. For only $6,499 I'll introduce you to a chap who won't charge you a cent over $6,498 for an introduction.
I charge as much as the second lowest bidder.
Second lowest because sustainable value extraction is important to me.
Re: They thought they were joining an accelerator – instead they lost their startups
#86>"It was very sad to call it quits because getting the funding to make those units was the only hurdle before making serious progress,” Temple said. “If they connected me with investors like they said, I could have made my invention, gotten efficacy and would be shipping units right now. I really do believe that." It's unfortunate to see a founder believe that one accelerator would make or break their company. Typica…
> Typically an accelerator amplifies your existing trajectory
If only they had a word increasing velocity :)
Re: They thought they were joining an accelerator – instead they lost their startups
#87Add 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.
Most VCs add zero value aside from the money. Bootstrapping is always better, if you can do it, of course. Exhibit A: Naval Ravikant, the flagship SV investor, widely regarded to as "a wise man", just released a kind of crappy messaging app that flopped. Imagine having unlimited leverage, unlimited money, unlimited reputation, a huge audience already in place and still that not being enough to put out a competent pro…
Ya I do not know why people hold Naval up so high. What has he ever done?
Re: They thought they were joining an accelerator – instead they lost their startups
#88> So she paid a $7,500 deposit and was all set to join Newchip when a founder friend told her to “never pay for introductions.” Hopefully everyone knows this here, but if you paid for an introduction it's a negative signal: just cold email. That being said, I'll make intros for only $6,500 and no warrants.
Of note from the article: she complained and was refunded the money after being stood up for the meeting, but they never cancelled the contract she paid to sign that gave them the right to buy her out of her own company for pennies, so once it passed to bankruptcy the creditors still took her company.
They didn't directly take her company, right? They held on to warrants for some % of the company, which killed her chances of fundraising?
Re: They thought they were joining an accelerator – instead they lost their startups
#89Earlier quoted context omitted.
>No one gives away 20% of a company for advice. You'd be surprised at how common that is. Wouldn't you be inclined to believe that @naval wouldn't want to use that capital, connections and whatnot to support the single project of its own authorship in its lifetime? The results speak for themselves. I have another theory, VCs freeride on the success and luck of other people's projects, which (sometimes) are so good an…
This is kind of a confusing perspective considering VCs are giving you money to pay for the operations of your business. Money is money no matter how stupid the giver is, their money won’t leech value from your company itself. As for founders ending up with nothing, in those cases their investors ended up with much much less than they were hoping to too. Plus there’s plenty of other cases where founders get rich off…
>>Money is money no matter how stupid the giver is, their money won’t leech value from your company itself.
Yeah, this isn't true for a number of reasons.
1) The money you accept is given in trade for a percentage of the company and that means influence in the company. That influence almost always comes in the form of board seats which literally drive the direction of the company. I've seen many successful companies do some really stupid things because the investors wanted it that way and it actively hurt the business.
2) Certain investors come with a set of prestige. You're the n a forum which is known for just that.
Who you take money from certainly matters.
Re: They thought they were joining an accelerator – instead they lost their startups
#90So the question to the experts here is, what should someone look out for as a potential founder or employee (early or late)? I've so far seen 0 upside from the three startups I have worked at and I am not likely to think of options as an incentive in the future. Is this the new norm? Are the days of equity as compensation dead (even for founders)?