undefined | Better HN

0 pointsverdverm4y ago0 comments

Wouldn't YC be one of the defrauded investors?

0 comments

4 comments · 2 top-level

camdat4y ago· 2 in thread

Sure, I'm expecting a statement more along the lines of "Here's how we attempted to do due diligence and failed (and thus failed in our responsibility to fund investors)" rather than accepting fiduciary responsibility for Stablecoin.

clpm4j4y ago

I think the due diligence at the point of acceptance into YC is fairly minimal. It might not even go beyond the application answers and the 10min interview... not sure though. I'd be curious to learn more about it.

*edit: Seems YC participated in the follow-on round after the batch ended, so I imagine some extra due diligence goes into that.

verdvermOP4y ago

The point is that they are an investor and do not run the company. Would they have known about allocation strategy, how to evaluate that? Even if they did know, are they in a position to control or dictate anything within the company?

This applies to investors at any company. At some point you have decided to believe in the founders and executive team, rather than deal with daily operations and micromanaging your portfolio

2 more replies

davidgerard4y ago

yes, that's the way the scam works.

* all the laws are to protect investors from issuers

* splash around money to incentivise securities fraud

* buy a pile of tokens

* if the SEC doesn't bust the issuer, the VC wins big

* if the SEC does bust the issuer, the VC gets their money back and doesn't lose

it also realises liquidity much quicker than the long and tedious process of backing a tech company that does things

So did YC buy the tokens, or buy equity in the company? If the latter, then they're part-owners and may claim to have been completely hands-off, but might need to show it.

j / k navigate · click thread line to collapse