In the run up to its 2004 Series B funding Pandora was running on financial fumes. Pandora wasn’t able to pay its employees for an astounding two years between 2002 to 2004 while it worked on producing a viable commercial product. Not paying full-time employees is very, very illegal in California, where Pandora is based.
“We had no idea we were breaking the law," Westergren said.
Over that period, Pandora accumulated $2 million in back wages owed.
How this story did not end with Pandora getting nuked from orbit in a court of law, I have no idea. And the bit about Westergren having "no idea we were breaking the law" (wink, nudge, say no more, guv!) is the perfect cherry on top.
I guess we're supposed to celebrate not paying your employees for years as some kind of Triumph of Entrepreneurialism, though. And I suppose it is, if you're Tim Westergren! (Not so much if you're one of the employees who he essentially strong-armed into loaning him tens or hundreds of thousands of dollars at zero percent interest, but who cares about them.)