Tether truthing the eminent doom of tether is all well and good but why aren't we talking more about YCombinator promoting startups that burned their customer's money by sending it to anchor protocol UST ponzinomics while lying that those investments were held in USDC and USD?
Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator. You need to make bets everywhere and hopefully some stick. The other side of that is some don’t stick, and some go proper pear shaped. Make enough bets, it has to happen.
I’ve got no idea what their original pitch is, I certainly wouldn’t back a crypto startup that ostensibly aims to do something like what it looks like they tried to do, but if I was making 300 bets a couple times a year I’d be silly not to do something in the space.
Whether a ycombinator seal of approval lead to investment which lead to consumers getting fleeced and culpability in that situation, I don’t know. It’s crypto. If you’re silly enough to think it’s a safe investment, you’re blind. A company can also say a lot of things differently from first pitch to accepting millions from consumers. As an investor with 10%ish equity, you’ve got some sway, but you don’t have much sway. And who is to say their bet isn’t the right one.
A stain, but I don’t know about righteous indignation, I don’t know how much culpability transfers back to yc… but I don’t feel it’s a whole lot
> not making any bets in crypto is not a sensible accelerator. You need to make bets everywhere and hopefully some stick.
Thats not how it works; VC's are allowed to pass on anything they want, and it turns out they dont cut a fat cheque to every idiot who knocks on the door.
And how many Porn companies has YC funded? Zero as far as I know, is that because porn related companies have zero chance of being profitable? Or is it that they take a moral stance against that industry?
Nor as far as I know are they in the asphalt industry, likely because they are focused on tech. I am sure some people out there find asphalt a moral issue (I personally dont) but I suspect they are not spraying some funding around in that industry because it isnt really of interest to them or their investors.
The problem here is not a bet on crypto but a company that basically went "oh hey sorry too bad the USD displayed on your account is actually UST. K thx bye".
I think I cover that. Company does not equal backer. Bad behaviour by company is not the responsibility of investors, it’s the responsibility of the board, the exec, and ultimately the courts. Investors can shape and influence, investors hopefully provide a filter and feedback, but everyone can get swept up in a good story. Company should be caned. Yc? I’ve already said what I feel.
It's not the legal responsibility of the investors, because society has given them limited liability. It may or may not be their moral responsibility, depending on what they knew, encouraged, or whatever. And the usual payoff for morally-shady but legally-blameless behaviour is reputational damage.
Y-Combinator exists to make Paul Graham and it's investors money. Morality is not money. Y-Combinator doesn't exist to make morality for its investors.
Maybe it'd be better if our society reprioritized so "these organizations are all amoral actors who exist for no other purpose except to fatten the wallets of their owners" isn't the assumed norm.
This is not a good argument. Of course companies can optimize for multiple objectives and to pretend that any company doesn’t is willfully blinding oneself to reality.
> Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator.
That's why we have the concept of "due diligence". YC is absolutely allowed to make bets in the crypto world; but they have a brand name and a reputation of serious investors. I know that when I see the YC logo on a new product I discover, it serves as a signal. And having a fraud company being allowed to use the YC brand on their website, because YC wanted to work with them and gave them money to allow them to grow (meaning: "cheat on more people") is definitely a stain on their track record
If you’re financially backing and providing direct hands on strategic guidance to an active and blatant scheme to commit securities fraud then you are doing something you should not be doing.
The previous sentence isn’t and shouldn’t be particularly controversial.
> If you’re financially backing and providing direct hands on strategic guidance to an active and blatant scheme to commit securities fraud then you are doing something you should not be doing.
As you wrote it as a generic hypothetical, no, it’s not really controversial to me. If however you are meaning to say it as a passive aggressive way to accuse YC, yeah, it very much is controversial.
To not be controversial (for me anyway), you’d need to meet some burden of proof with evidence. How much would be enough to meet that burden? I’m not sure at this moment, but as you’ve presented zero that I’ve seen, I think “more than zero” is a fair starting point.
By definition, a “YC Company” is given hundreds of thousands of dollars and direct hands on strategic advice on how to run the company. That’s the meaning of the concept.
The company in question has blatant securities fraud as their core business model.
QED
Here’s a logical construct in return. When people you like do unethical things they are still unethical.
I feel like there’s a lot of leaps in your “logical construct” there.
First and foremost, did YC approve of this “core business model”? Sure, the founders got into YC, but did they pivot during the program (frequently happens)? And while YC may be on the board, they don’t have controlling interest either.
So yeah, there’s a lot of scenarios where people “you know” and/or “partner with” do unethical things, but that fact alone doesn’t mean you are unethical. You very well could be, but guilt by association isn’t enough proof here imho.
It isn't particularly controversial, but who is to say that the founders in question took the advice being given, or even showed up for the feedback sessions? Has anyone ever been kicked out of YC?
Given the number of companies that have gone through the program, I'd be surprised if there wasn't at least one that completely ignored everything the founders didn't want to hear or do.
Hmm. Both those cases seem to be more along the lines of "said/posted things that made YC look bad" rather than "kicked out for ghosting their mentor" or "kicked out for scamming their users"
> Or is it bad to talk about such things around here?
Don't think if there is good reasoning and no name calling etc.
I would love to hear the explanation how these companies even got into YC from the people who picked them. Is this some type of divide between purely making money at YC (which can be dirty, immoral, bordering on criminal etc) and the tech community of HN who are generally against that sort of thing?
I mean it's not only crypto; it's dark patterns, privacy invasion etc; HN is generally against that, but probably many YC companies would be dead without them.
It's obvious YC would make some crypto bets. The same way Ark invest is doing on the public markets, YC will do at the seed stage to ensure they have exposure to a market segment that might turn into a big thing (I'm skeptical, but it's not impossible and I don't have a crystal ball.)
What I'm curious about is the initial pitch. Did YC have a way to know that company was a terrible (potentially fraudulent) idea, or did the founders mask it sufficiently that it would have been difficult to tell?
Either they are incompetent to realize that crypto is 99% a scam and should be avoided or they knew it was a scam but still thought they could make some money before it all fell apart (Coinbase investors)
Look, I tend to agree with you. Crypto has not found it's use case, it has a lot of scams, a lot of environmental issues, and other problems. It's been many years, it's fair to think if it hasn't found that killer application yet, that maybe it never will.
But it's also still possible that it will. If you make a living by making long bets, then it's completely reasonable to want exposure to crypto.
If you are in the business of promoting your brand to young entrepreneurs, so that they include you in funding rounds, then yes, it makes sense to have exposure to anything that young entrepreneurs are working on.
If you are in the business of owning a piece of any company that may go public via IPO or SPAC one day, then yes, might as well give money to anyone who seems like they may be able to get to that finish line.
If on the other hand you are in the business of predicting the future of technology, it doesn't make sense to have exposure to technologies that are 99% scams on the off chance that someone accidently makes something useful in an effort to get rich. There is a lot of real innovation happening in the world that deserve that funding.
That 99% number you're quoting is made up. It's a value call. I think it's a reasonable position to give crypto a small chance of becoming something really big. If you're in the business of making long bets on the future, you want a piece of everything that fits that description. Including crypto. You don't know which bets will pay off, and it's nearly impossible to make an educated guess. It's simpler to just invest in everything that has that potential.
If a group of people created a perpetual motion machine community, would they deserver some funding? How can you prove that they are not going to discover new physics that allow energy generation from nothing?
Are you aware of the search feature? Or are you wondering why people aren't talking about something tangential in this thread specifically?
People talk about YC companies all the time. There is no weighting, no one flagging posts about YC companies. Most people here aren't part of YC, we have no reason to give them any more leeway than anyone else. The main reason no one in a random cryptocurrency thread is talking about one random cryptocurrency company is because that company is not a significant part of the industry, and no one except the people getting Goxxed even know it exists.
Didn’t we have a absolutely massive thread about this just earlier this week? How much more can we talk about it? Is it the only thing we should be talking about?
I’ve got no idea what their original pitch is, I certainly wouldn’t back a crypto startup that ostensibly aims to do something like what it looks like they tried to do, but if I was making 300 bets a couple times a year I’d be silly not to do something in the space.
Whether a ycombinator seal of approval lead to investment which lead to consumers getting fleeced and culpability in that situation, I don’t know. It’s crypto. If you’re silly enough to think it’s a safe investment, you’re blind. A company can also say a lot of things differently from first pitch to accepting millions from consumers. As an investor with 10%ish equity, you’ve got some sway, but you don’t have much sway. And who is to say their bet isn’t the right one.
A stain, but I don’t know about righteous indignation, I don’t know how much culpability transfers back to yc… but I don’t feel it’s a whole lot