I'm a founder, I'm at Bootup Labs | Hacker News Reader

I'm a founder, I'm at Bootup Labs

dshan.me

25 pointsdomino21 comments

One of the events that comes to mind, as I read through the roller-coaster that is Bootup Labs, was an event that happened about five years ago in our company's early history. We had a tiny little engineering staff, and were working out of a small office in San Mateo, CA, and had invested a _ton_ of time and energy into fund raising, but finally had managed to get a term sheet from a good second-tier VC. Based on that, we managed to get a board member, hired a few employees, and in general thought that we had 6-9 months of runway...and then the funding dropped through. The VC basically just walked away - to this day, I don't think we know why - certainly no developments on our side.

We had to scramble to make payroll (and pay the rent) and our executives _truly_ earned their salary/equity for those months while we tried (and eventually succeeded) to raise funding from somewhere else. It was a defining moment in our company's history.

I guess this is just my way of saying that _every single_ entrepreneur should be prepared for their funding to disappear until they have the check cashed and sitting in their bank account. You have to have a Plan-B that leads to success, whether it be consulting, credit-cards, friends-and-family, or living on zero dollars.

That's just the reality in this completely unfair world of ours. I particularly like the fairly positive attitude of the statusly guys - they aren't vindictive, or whining - they're just sharing their war story, and they finish off with just excellent advice:

"If you’re a Startup, and you’ve been accepted into one of these incubators, be sure to get some sort of paperwork done where money is provided, or proof of income is shown, or something. No matter how nice the people seem, and how badly your heart wants your business to succeed, don’t get yourself into a similar grey-area/possibly unethical situation."

> I guess this is just my way of saying that _every single_ entrepreneur should be prepared for their funding to disappear until they have the check cashed and sitting in their bank account. You have to have a Plan-B that leads to success, whether it be consulting, credit-cards, friends-and-family, or living on zero dollars.

The above suggests that you "finish" fundraising. You don't. You can't stop fundraising when the check hits the bank because you're already behind schedule for raising the next round.

I think DHH (and others) would disagree with you.

At some point you need to stop raising money and start raising revenue.

> At some point you need to stop raising money and start raising revenue.

Actually, you need to start raising revenue before you stop raising money because you need to keep raising money until you've got sufficient revenue.

My point was that you're continuously raising money until you hit that point

OT: Summify is a fancy Snap (http://www.snap.com/) and is equally annoying. Is there anyone who likes these link preview plugins?

Michael Arrington seems to be fond of them.

I think he was, but he scrapped it. I don't see those preview links on TechCrunch anymore.

I wonder if this guy would be seeing things this way, if his company was among the 4 that got cut and not the 3 that didn't.

I wonder if he's seeing things this way BECAUSE he doesn't want to be the next one to get cut. See, now Bootup Labs are "receiving something in return" from this startup like they wanted. (I don't mean to imply that this guy is dishonest, but when your situation is as precarious as his was just shown to be, you will want to curry favor.)

Hey guys, so that's my post. I'm the founder who was here with Jamie, who I consider a friend and think is a really talented and genuine guy. I've watched this story grow and I think even Jamie might agree that it's been hard (and largely inappropriate) to communicate all the specific details which might inform such a wide audience on the events around here.

I was specifically emailed by 'icey' to jump in and be a resource. He/she asked me specifically regarding the stated financing situation prior to my moving to Vancouver from Chicago and joining Bootup.

It was contingent on closing the round. I'm not sure what to say other than that was clear. I took that risk knowingly.

You know, I'm having difficulty applying a separate set of standard to Bootup. Something like this wouldn't have happened if it were Ycombinator; I'm thinking: why should you take the standards you apply to one incubator, and exempt another from just that set?

Seems rather dodgy to me.

To be honest, for all the talk about 'deals fall through' and 'I'm sure they tried their best', things like this shouldn't have happened in a startup incubator. Things like this wouldn't have happened if the Bootup people knew what they were doing. And a PR fiasco of this magnitude wouldn't have happened if Danny and Boris had been intelligent enough to be humble and apologetic, right from the get-go.

Now, correct me if I'm wrong, but something tells me we're not dealing with professionals, here.

That is a huge risk for an incubator firm to expect from entrepreneurs, particularly when the firm is set up in such a way that they assume next to no risk. The Bootup intake timing really should have been adjusted to allow for confirmation of funding to come through.

It was made clear, or it was clear because you read through all the agreements?

I'm asking because I think it's a different story if it was buried in some fine print versus stated clearly up front.

Jamie is the one who brought such a wide audience to the story, but he didn't mention anything about being aware of the chance that there may not be any funding.

I still think that what Bootup has done is pretty shady, but it may end up being less shady than the blog posts have made it sound.

I re-read my answer to your question and wanted to clarify; the fact that funding wasn't secure was clear before I moved to Van. It was included as a contingency on the (simple and short) term sheets.

All I can offer is that it wasn't buried in fine print. It was clear and it was something we all had to deal with as soon as we arrived in Vancouver. I think that it was unfortunate is one thing, but that it was 'shady' is misconstrued.

They knew that all of the funding was contingent ahead of time?

I wonder how that was communicated to them.

The fact that everybody at Bootup Labs keeps using the vague, single-word description of "contingent" is makes me suspicious. If the terms were presented to the founders that vaguely, I wouldn't blame some of them for not realizing just how "contingent" they were.

When it comes to getting money, assume "not vague" to mean "cheque cashed, not bounced".

Imagine your bank saying (discounting the existence of the FDIC) "sure, you can deposit your money here, we'll probably have some cash around if you ever want to withdrawal it — maybe!" Obviously, there are multiple sides to the story, but this is the gist of what I'm interpreting from it thus far.

I'm next door to Bootup Labs... all I know is, Hackernews needs to chill out. The people at Bootup, both the startups and management, are great folks who care about tech, care about the community and about innovation. The character assassinations of the people involved are unwarranted.

Securing funding is always hard, and the whole VC scene is crazy. Some companies get millions thrown at them even though they've been burning cash for years, others have great ideas and just can't secure some pocket change to get going. As far as I can see, Bootup is doing a pretty good job.

--After everything that we did for you and Steven

Enough said about their attitude towards these individuals. Like they did them some type of favor, business is business and deals fall through all the time, but to then turn it on those guys like they should be grateful for getting screwed is just absurd and then to complain that they did not get anything in return for paying 2 months rent for the guys. Dan's post reeks of a self entitled prick, like he some sort of benevolent god or something and that is why they are getting their just crucifixion, not because a deal fell through.

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