from Hacker News

Booted out of Bootup Labs

by livejamie on 4/15/10, 1:57 AM with 158 comments

  • by cperciva on 4/15/10, 2:12 AM

    When I saw this title, my immediate thought was "hmm, I wonder if this is about Bootup Labs?"

    I've met the people behind Bootup Labs, and I like them. They're smart. They're enthusiastic about what they're doing. But I was never really convinced that they were able to make things work financially. I've seen enough startups that I can usually tell when a startup is running on fumes and spending all their energy on trying to raise more funding... and that's the vibe I've been getting from Bootup Labs for a while. Not really a good vibe to have coming from a group with the raison d'etre of providing funding.

    On behalf of Canadians in general and Vancouverites especially: We're really sorry about this. Nobody should have to go through what happened to you. We hope you'll come back some day under better circumstances.

  • by DanBlake on 4/15/10, 3:18 AM

    Danny, one of the bootuplabs founders just posted this comment on the post.

    /////////////

    This is not how it went down Jamie. After everything that we did for you and Steven, I'm shocked at how you have twisted the truth for PR reasons.

    - you were in our office for 2 months, not 3.

    - you program is 5%-15% for $150k over 8 months

    - you received $6k over that 2 months

    - we received nothing in return.

    - we paid your legal fees.

    - we introduced you to many people who you can still call on today.

    We are not out of money, we just closed a round. It was a condition of their investment that we let you go.

    Yes, it wasn't an ideal situation, and we didn't plan on it working out this way. But in the end, I made sure that you got the better end the deal

    /////////////

    Sad to see them trying to argue over facts when these guys moved across the country and gave up everything to be there, then they act like they should be happy to have even had the chance. Wow.

  • by dannyr on 4/15/10, 5:21 AM

    From http://blog.bootuplabs.com/2010/04/14/wertz-joins-board-firs...

    "We supplied a great deal of support and value to the 7 companies over the first 2 months of our 2010 cohort, and we received nothing in return for the 4 companies that were cut"

    It seems like they are implying that the 4 companies somehow owe them something.

  • by rdl on 4/15/10, 4:18 AM

    http://blog.bootuplabs.com/2010/04/14/wertz-joins-board-firs...

    I'm not really sure how I feel about this. It seems like they behaved pretty reasonably for a regular company, but as a fiduciary, they probably should have held off and not funded anyone without funds in the bank, vs. relying on a mid-term capital call. (I wonder who bailed on the capital call and why)

    After this, I would probably be reluctant to move to Vancouver based on their line of credit promise unless I could see the funds in escrow; a LoC of $100k should mean $100k in an account I control, with equity going to them based on how much I withdraw. If they were Sequoia I'd be willing to accept a promise, but clearly how they have demonstrated they have pretty limited resources.

    They at least seem fairly transparent about everything, so it's not dishonesty, merely bad judgment.

  • by puredemo on 4/15/10, 2:19 AM

    What a horror story. What sort of program offers $100k to that many groups and doesn't follow through? "Whoops, we were $500k short."

    That goes beyond just being embarrassing.

  • by livejamie on 4/15/10, 3:18 AM

    I shouldn't have said that Bootup Labs had "no money" - I should have put "no money for us."

    I'm not trying to suggest that Bootup Labs is bankrupt or anything, I apologize.

  • by mikeyur on 4/15/10, 2:57 AM

    Jamie, I have a friend at Digg who is trying to contact you. They're looking for designers, if you're interested in a job.

  • by jamesshamenski on 4/15/10, 4:33 AM

    Boo the VC's in this one!

    The investors of BootupLabs did not have confidence in 57% of their latest pool of startups. i wonder why they invested at all if they dont fully back their judgement?

    Here's what probably happened, I bet the investors squeezed Boris and Danny with the alternative option being closing their doors early on all 7 companies. Sometimes VC's do evil things to extract more ownership in last minute negotiations (knowing very well that BuL was out of cash). I bet Boris and Danny would have wanted to follow through.

  • by mikeyur on 4/15/10, 4:06 AM

    Bootup Labs has posted their side of the story on their blog:

    http://blog.bootuplabs.com/2010/04/14/wertz-joins-board-firs...

  • by dedward on 4/15/10, 4:15 AM

    Can I just say that the fact that either party here is duking this out in a public forum is just..... unprofessional? Especially from the VC firm itself?

    I suppose I'm a newcomer to this "VC/incubator/startup" community - but in any other life situation, when I decide to pack up and move somewhere far away, I make sure I have stuff in writing, and cash in the bank, and all my i's dotted and t's crossed before I quit my old job and jump on a plane. I also make sure, as best I can, that expectations are the same on both sides. I don't see why this is any different whether it's VC capital for some wild idea or a serious business proposal or just a plain old job somewhere else... what ever happened to common sense?

  • by lyime on 4/15/10, 2:49 AM

    One would thing that it would be standard practice that they give you a term sheet on acceptance. As soon as you sign the term sheet, money should be transfered. At the end of the day they are investing in your company, and term sheets are typical. This is how YC works.

    Sorry to hear about your experience.

  • by vancouver on 4/15/10, 5:09 AM

    The fact that the Managing Director of Bootup would confront allegations in a public forum does not bode well for his organization.

    I would hope day to day business decisions at Bootup are not done in the same manner. It is ,at best, completely unprofessional.

  • by jbox on 4/15/10, 4:55 AM

    Acquisition, investment or acceptance into an incubator are all great things but don't build your startup in such a way that success is dependant upon them.

    Ultimately, your success will depend on one thing - you. Build your business for profitably and don't count on money until it's safely cleared in your account.

  • by livejamie on 4/15/10, 7:25 AM

    This has been written about on RWW now:

    How to Burn Bridges with Bootup Labs and Other Investors

    http://www.readwriteweb.com/start/2010/04/how-to-burn-bridge...

  • by jfarmer on 4/15/10, 5:15 AM

    It sounds like Bootup Labs wasn't able to draw down on some of their LPs. So, it's not nefarious, but it would make me think twice before accepting (the promise of) money from Bootup Labs.

    It ain't real 'till the money's in the bank.

  • by bandhunt on 4/15/10, 3:17 AM

    That really sucks! But dude, why give up on the idea? you're selling the domain and moving on? Incubators aren't necessary.. keep plugging away and launch anyway.

  • by elai on 4/15/10, 3:02 AM

    Why did bootup labs offer funding that is almost 7 to 10 times the 'industry' standard? It's disappointing that an incubator close to home really wasn't.

  • by vancity on 4/15/10, 4:37 AM

  • by paulgb on 4/15/10, 2:37 AM

    From @bootuplabs on twitter:

    > HI all: we're moving up the blog post we were going to put up tomorrow to this eve - please stand by

  • by chegra84 on 4/15/10, 3:07 PM

    I find the weird part about this is you are selling your domains. I vote no for this move. Find another way to make that cash but keep your domain and your co-founder.

    If these guys at bootlab accepted you, there is a high probability that someone else would too.

    [who knows post a donation page and see where it goes. I think most of us here knows what survival mode is like, so would be sympathetic to your cause]

  • by rdl on 4/15/10, 3:55 AM

    How hard is it to set up a Vancouver startup independently, if you have 2-3 US citizens who want to relocate? Assume you have $100-200k of your own funding.

    Gaming the tax credits seems like it takes a bit of effort, but lowers the effective tax rate substantially below even Nevada.

  • by djb_hackernews on 4/15/10, 6:01 PM

    Was it ever mentioned that this could be an outcome of coming to Vancouver? Either side hasn't said.

  • by benologist on 4/15/10, 2:15 AM

    Wow that story really sucks.

  • by stevederico on 4/15/10, 3:04 AM

    everything happens for a reason, I am sure you will create something create after this.

  • by keltecp11 on 4/15/10, 2:15 AM

    Why this has not been bumped up more I have no idea... Fuck man... that is fucking horrible. When I first got into DreamIt Ventures, all of my attorneys and family and friends said the same thing... are you sure? What is the paperwork like?

    The Paperwork was 2 PAGES! I was in law school at the time, I was looking at paper work of contracts that were a minimum of 26 pages!!! And 2 get 2 pages?! Unreal... and quite scary. We took a gamble... we signed the documents.

    Left MORE questions thn answers... by far. Fortunately, my god, I never realized how lucky we were.

    I'll keep my eye out for something that will pay.

    Do you have any contracts from them? I'd like to see. Post them on DocStoc.

    I do not know Canadian Law, but I know someone who might. Not that I could represent... but I'm curious to see if you might have some legal action!

    Embarrassed or not - that is bull shit.

    -P