They raised at an inflated valuation and seemingly received a favorable multiple (100-10x “7-figure” revenue). The fact that they rode out the company to 0 means they had board control and were never fired. So they are ultimately responsible for every decision they made. Including over-hiring and not firing their clueless VPs.

I say this as a founder of a yc-backed company that was acquired. I know the pressures of short-sided VCs. I also know that the job of a founder is to pick which advice you follow.

I don't even like VCs and I feel like what was pulled here was pretty galling. How does someone rationalize calling up an early investor and telling them to eat their investment because...more money for me?

There would be zero negative PR fallout from that.

This founder basically ripped off his investors, it's completely unethical - and he'll never get a dime of VC money again.

If VC firms didn't care about getting their 1x money out then the terms wouldn't be there in the first place.

It's normal to do that, and a $500M firm returning 10% a year takes 20% of that, so 2% which is not really a huge amount of money for a team of people.

Yes. Writing a check and occasionally shooting off an introductory email has its uses but it shouldn't be compared to actually building a billion-dollar product. Many founders need VC money and VCs certainly deserve some type of compensation. It's quite dubious, however, that VCs deserve double-digit equity (and often 50% of the company or more) just because they had money at a time when someone else didn't, and allowed themselves to be talked into giving that money to someone who was able to do something good with it (which, in VC, is essentially an accident; they are throwing money at college kids and seeing what, if anything, ends up sticking).

>Working on something for a month absolutely doesn't entitle you to a share of the proceeds two or three years down the road, if there was no written or verbal agreement.

If you leave the equity split undefined, it's undefined, not 0.

We don't know what was done in that 1 month time frame. It's possible that Jeremy laid out an entire roadmap from concept to acquisition that Cruise followed meticulously. If this is the case, he is certainly entitled to a significant amount of equity.

Perhaps in that one month, Jeremy did nothing but take up space in the office and perhaps he was dismissed for his uselessness. Under such circumstances, supposing there is reasonable documentation of this, he's probably entitled to little or no equity. The judiciary will have to consider the evidence and make a ruling as to what is equitable.

>Even if he had options, he would have had to exercise them years ago at most companies.

Founders get real stock, not options.

Here's a fun thought exercise: When is the VC the problem and not the founders? How do you even go about firing a VC? Have you ever read VC's "fantastic journey" blog post?

Other than being treated like toxic waste by every prospective VC and business partner until the end of time.

The VCs have done this to themselves. They put up all the money, they should have never allowed themselves to be put into this situation.

Decades ago, when I was at startups, this was 100% clear, cut and dried. The Golden Rule. People who have the gold make the rules.

I'm sure this won't be a popular opinion, since more HN readers are founders and employees than are VCs. But don't simply downvote. Explain. Articulate why, after taking billions of dollars in VC money, you feel like you're still owed control.

... then tells stories that prove at least some VCs to be indefensible assholes.

But this doesn’t seem like that. It seems like any disappointed investors just didn’t do the bare minimum you’d expect with an investment of $100m.

Sorry for the tough situation, but this is your fault; the investor didn't destroy your company - you did.

Please come back and update is on the story if you stick with it there. Might help some of us later.

You think that the startup employee, who's placed a bet on their own personal value, doesn't deserve sympathy, but the VC, who gets to hedge their bets, does?

If you’re going to say it’s your startup and put founder in your title, you also have to be responsible for it succeeding. You don’t get to have it both ways.

EDIT: parent comment was edited to say it’s him being vulnerable. I don’t think so; it’s him farming engagement for marketing.

First, his company was VC founded. He poured 10M in the company that's very close to having raised 10M

Second, you dont go out of business because someone created a competing offers

Last, he his a successful guy, it is difficult to go openly on Twitter and says "I failed because we were not good enough" it is easier to follow the trend of our time saying that VC is evil.

And if on joining, you were told about 2 classes of stocks - one for the founders and one for the employees then you should have understood that this was a distinct possibility.

This VC is just using this small soapbox to warn Airbnb not to eff with him. And to try to stem the tide in Silicon Valley where successful founders are compensated for getting a company upto a $1 billion valution WITH revenue.

If an employee had written this, I would have been a little (tiny) bit sympathetic but for a VC to act like he cares for the employees -- you HAVE TO BE KIDDING ME!!!

This is a clear cut case of a lightweight, scatterbrained, under=performer getting the boot from his own partners.

Go cook some bacon or something!

“Sorry team, our main VC advised us to keep our money in SVB because it’s the right thing to do. We can’t make payroll. Our VC, true to their ideals, kept their cash in SVB too. They can’t help us. Kindly cast your blame on the thousands of startup peers that withdrew and remain unscathed. Their blatant self-interest may have killed us, but we are the true moral victors.”