A very real and sad start up story
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A very real and sad start up story
1–7 of 7 posts
Re: A very real and sad start up story
#2Kind of a tool .... but i feel bad for him!
Re: A very real and sad start up story
#3Link to his full article: http://thewebkid.com/Escapia.aspx
At least the company is being acquired instead of simply running out of money and shutting down.
Lesson 1: Don't invest money you can't afford to lose, especially in a high risk startup.
Lesson 2: Don't work for free for 2 years for anyone (except yourself). Doing it for 4% equity is absurd.
Re: A very real and sad start up story
#4It's sad that they were taken advantage of but you have to have someone on your side, it seems that he didn't know what was going on in his own company.
Re: A very real and sad start up story
#5Link to his full article: http://thewebkid.com/Escapia.aspx At least the company is being acquired instead of simply running out of money and shutting down. Lesson 1: Don't invest money you can't afford to lose, especially in a high risk startup. Lesson 2: Don't work for free for 2 years for anyone (except yourself). Doing it for 4% equity is absurd .
I agree, I have been working for free for 3 years so far on my start-up but we have been ramen-profitable from the start and I am a Co-founder who has Co-founder stock. He sounds like he didn't know they were getting funded or anything, and who will let someone invest 100k and he only held 4%. They should have applied to Y-Combinator.
Re: A very real and sad start up story
#6If there were four founders, did they not negotiate to set any other board members up before to outnumber the one VC board member?
Sounds like they had bad legal advice.
So what was the term or terms that screwed them in the end that let the VCs take control?
Re: A very real and sad start up story
#7It seems like the most likely scenario is that they burned through the VC cash and couldn't raise more, so they were forced to sell. If the VCs had some high liquidation preference it could easily explain how the common shareholders and early investors (like his dad) were wiped out.
It is obviously a total bummer that his dad lost $100k in the process. But, he tries to make it sound like he was tricked out of his pension or something. This was a very high risk investment where the most likely outcome would be a total loss.