

I'm a founder, I'm at Bootup Labs - domino
http://dshan.me/blog/2010/04/im-a-founder-im-at-bootup.html

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ghshephard
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."

~~~
anamax
> 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.

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

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

~~~
anamax
> 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

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

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dnsworks
Michael Arrington seems to be fond of them.

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

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joegaudet
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.

~~~
chc
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.)

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dshanahan
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.

~~~
icey
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.

~~~
dshanahan
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.

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

I wonder how that was communicated to them.

~~~
chc
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.

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

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kylebragger
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.

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unconed
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.

~~~
kls
\--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.

