[CPLX]

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.

[jsjohnst]

> 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.

[CPLX]

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.

[jsjohnst]

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.

[webmaven]

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.

[nradov]

Yes companies have been kicked out of YC. I don't know whether these allegations are true and have no opinion on which party was in the right here.

"Dark CEO Paul Biggar said YC booting him for tweeting about internal posts on skipping COVID-19 vaccine lines.

Prolific CEO Katia Damer said she was cut after calling out misogyny by YC founders.“

https://www.businessinsider.com/ycombinator-katia-damer-paul...

https://techcrunch.com/2021/06/09/does-what-happens-at-yc-st...

https://news.ycombinator.com/item?id=27399581

[webmaven]

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"

[diggernet]

Scamming their users makes YC look bad. Seems like a good reason to boot them.

[webmaven]

Eh.

Scamming their users mostly makes the Founders look bad.

NOT kicking them out is what would make YC look bad. I wouldn't expect it to happen immediately, though, if YC does an internal investigation to see whether any principals, mentors, or advisors are implicated in the unethical behavior as well, whether by commission (giving unethical advice) or omissions (such as failing to raise red flags).

YCs public track record in terms of self-reflection on possible errors in judgement isn't particularly encouraging though. From the outside the org seems to focus on evolutionary changes though certainly at a fairly rapid clip (which means that cultural norms are hard to establish and maintain, giving the "carriers" of non-normative behavior opportunities to wriggle around avoiding scrutiny. For new extensions of the program YC favors rapid experimentation and iteration, which may fail to establish compatible norms depending on who is leading the effort.

It is worth contrasting one of the more stable outposts for YC culture, this very Hacker News site. YC has a very strong policy regarding not just avoiding a conflict of interest when it comes to moderation of posts critical of YC, but moderators have been instructed to moderate those posts and discussions considerably less than would otherwise be indicated, to avoid even the appearance of a conflict of interest or self-dealing. That's a pretty strong commitment, and one that can be difficult to live up to (avoiding the appearance of a conflict of interest is a standard that judges are supposed to be held to, but not lawyers, for example). YC may or may not have always lived up to the spirit of that commitment (only insiders can know for sure), but it is reasonably plain that an ongoing effort is being made to live up to the letter of that commitment. Kudos to pg for establishing it early, and to dang for keeping it going.

The point I'm arriving at is that establishing and maintaining a cultural reference point like that is very difficult in an organization that is growing, changing, and sending out strange offshoots without a lot of explicit (even occasionally public) communication about similar bright lines and thou-shalt-nots, and outside of the HN context, we really haven't seen evidence for that.

[cuteboy19]

""No one could have predicted that risk free 20% apy project would be a scam""

[webmaven]

“Captain Renault: I'm shocked, SHOCKED to find that gambling is going on in here!”

[a croupier hands Renault a pile of money]

“Croupier: Your winnings, sir.”

“Captain Renault: [sotto voce] Oh, thank you very much.”