Scammed By A Silicon Valley Startup(medium.com)
medium.com
Scammed By A Silicon Valley Startup
https://medium.com/@PennyKim/i-got-scammed-by-a-silicon-valley-startup-574ced8acdff#.hkgnuhiny
558 コメント
Welcome to the club. It's pretty much a rite of passage here to spend some time with a psychopath VC, a completely self absorbed CTO with a rich investor dad that fuels his fantasies, or an idiotic CEO with an ego problem, and to pay the price for it (just time if you're lucky, time+money if you're not).
I've encountered this myself several times (down to the CEO using hire fast fire fast as a mantra), and judging from my friends' stories, most people have or will. When there are large amounts of money at stake, I guess it makes sense for charlatans and sharks to flock.
There are very few ways to tell accurately from the outset at first who's going to screw you over - I've heard horror stories of the sort from friends at startups backed by high profile entities like YC, famous startups that are often in the media for being "the best places to work at", companies with celebrity founders who have reputations for being "the nicest guys in the world", etc.
It's the kind of thing that you can only learn through a few painful experiences, I think. You do learn your lessons: never pay in advance for anything, don't put your own savings or core livelihood on the line for someone else's dreams, get everything in writing, talk to former employees of a company/colleagues of a founder before getting involved, never ever assume that what you have is anything more than an employer/employee relationship, etc.
I have to say that I'm impressed by how the poster handled it - keeping documentation, filing wage claims, etc. - the only thing she could have done better was not staying on so long when she wasn't getting paid, but it's an understandable mistake when you're in the moment.
I for one am glad I learned my lessons at 22 rather than at 45 with a family to care for and a mortgage to pay. The upside is that there are plenty of genuinely nice, passionate people - when you find them, stay close to them.
I've encountered this myself several times (down to the CEO using hire fast fire fast as a mantra), and judging from my friends' stories, most people have or will. When there are large amounts of money at stake, I guess it makes sense for charlatans and sharks to flock.
There are very few ways to tell accurately from the outset at first who's going to screw you over - I've heard horror stories of the sort from friends at startups backed by high profile entities like YC, famous startups that are often in the media for being "the best places to work at", companies with celebrity founders who have reputations for being "the nicest guys in the world", etc.
It's the kind of thing that you can only learn through a few painful experiences, I think. You do learn your lessons: never pay in advance for anything, don't put your own savings or core livelihood on the line for someone else's dreams, get everything in writing, talk to former employees of a company/colleagues of a founder before getting involved, never ever assume that what you have is anything more than an employer/employee relationship, etc.
I have to say that I'm impressed by how the poster handled it - keeping documentation, filing wage claims, etc. - the only thing she could have done better was not staying on so long when she wasn't getting paid, but it's an understandable mistake when you're in the moment.
I for one am glad I learned my lessons at 22 rather than at 45 with a family to care for and a mortgage to pay. The upside is that there are plenty of genuinely nice, passionate people - when you find them, stay close to them.
I think the title should be changed back. The author glosses over the single, real biggest red flag:
She never received any paystubs and the company was late on payroll as of before she was hired
I have never, ever been paid without either a paystub (as an employee) or generating an invoice which the business then paid (as a freelancer). The outright refusal to share how they arrived at the figure on her cashier's cheque should have sent her looking for a new job in the Bay Area or back to Texas.
The real lesson from this story is to always have a backup plan when making a big move: what do you do if you arrive and there is no job/no money? what do you do if you arrive and there is no apartment/room/house/etc.? Scammers exist and there is only so much you can do from a distance to avoid them.
She never received any paystubs and the company was late on payroll as of before she was hired
I have never, ever been paid without either a paystub (as an employee) or generating an invoice which the business then paid (as a freelancer). The outright refusal to share how they arrived at the figure on her cashier's cheque should have sent her looking for a new job in the Bay Area or back to Texas.
The real lesson from this story is to always have a backup plan when making a big move: what do you do if you arrive and there is no job/no money? what do you do if you arrive and there is no apartment/room/house/etc.? Scammers exist and there is only so much you can do from a distance to avoid them.
I've been burned repeatedly by startups recruiting me for one role which matches my experience/skillset, then after a month or so radically changing the role to one which I'd had no experience with. I get pivoting, I get needing to be flexible, but why would you hire someone skilled in networking operations and four weeks later decide that person need to design/develop your Windows application instead?
I've always been paid, however I now check to see if startups have actually filed the SEC paperwork when they claim to have raised a round, and verify with the investors they claim to have backing from that they've actually invested in the company. One startup I worked for lead the employees to believe we had a solid 18 month runway, when in fact the founders were covering payroll from home equity lines of credit. They didn't actually close the round until a year after most of the initial employees left as payroll became erratic.
Another startup I worked for on the basis of a handshake...never do that. After a year of developing the company's MVP the founder formalized the structure and equity of the company, cutting the four early employees out as co–founders and reducing our equity from 2% to 0.5%. As were were all working on handshakes, none of us had legally committed to working for him, so we all walked away. He lost the MVP since I had the only copy.
The last startup I worked for (and will ever work for), I was recruited by the CEO to come in and build a mixed-discipline technical team in a supporting role. Within a month it became fairly clear that I'd been hired over the objections of pretty much the entire management team, which had I known I wouldn't have taken the role. I was clearly pegged as "a bad hire" which would not have happened had anyone I'd interviewed with spoke up.
Throwaway account…
I've always been paid, however I now check to see if startups have actually filed the SEC paperwork when they claim to have raised a round, and verify with the investors they claim to have backing from that they've actually invested in the company. One startup I worked for lead the employees to believe we had a solid 18 month runway, when in fact the founders were covering payroll from home equity lines of credit. They didn't actually close the round until a year after most of the initial employees left as payroll became erratic.
Another startup I worked for on the basis of a handshake...never do that. After a year of developing the company's MVP the founder formalized the structure and equity of the company, cutting the four early employees out as co–founders and reducing our equity from 2% to 0.5%. As were were all working on handshakes, none of us had legally committed to working for him, so we all walked away. He lost the MVP since I had the only copy.
The last startup I worked for (and will ever work for), I was recruited by the CEO to come in and build a mixed-discipline technical team in a supporting role. Within a month it became fairly clear that I'd been hired over the objections of pretty much the entire management team, which had I known I wouldn't have taken the role. I was clearly pegged as "a bad hire" which would not have happened had anyone I'd interviewed with spoke up.
Throwaway account…
Penny, if you do end up reading the comments on here, be sure of a few things:
You have generated more traffic to their site than Jess ever will.
You are not alone in your experiences.
You are obviously a great professional and you will probably do well.
You have shamed the company into probable closure (which is a good thing) as the guy would get worse with more money and bigger teams.
For everyone involved in a startup there are huge risks. Most of the risks are borne by the founders, they get handsomely rewarded if things go well.
But they often don't. I wish the startup community would take heed at this great story and be more honest about the risks, instead of following the hype train.
Macho ego bullshit is to blame for a lot of wasted effort.
But it's really good to hear that you are back with your cat.
You have generated more traffic to their site than Jess ever will.
You are not alone in your experiences.
You are obviously a great professional and you will probably do well.
You have shamed the company into probable closure (which is a good thing) as the guy would get worse with more money and bigger teams.
For everyone involved in a startup there are huge risks. Most of the risks are borne by the founders, they get handsomely rewarded if things go well.
But they often don't. I wish the startup community would take heed at this great story and be more honest about the risks, instead of following the hype train.
Macho ego bullshit is to blame for a lot of wasted effort.
But it's really good to hear that you are back with your cat.
Wage theft causes American workers to lose an estimated $50 billion dollars per year.
Usually low-income workers, many of whom are not in a social class where they're friends with a smart lawyer, are the victims.
This is just the SV flavor of what millions of American workers suffer from year-round.
Usually low-income workers, many of whom are not in a social class where they're friends with a smart lawyer, are the victims.
This is just the SV flavor of what millions of American workers suffer from year-round.
"About a month in, our interim leader returned to Korea, and a woman was brought in who had worked at several video game companies.
She used to know our CEO’s in college. She was kind, thoughtful, and attentive. I knew the company would eat her alive.
After our boss departed, I took over a few of his duties. One of them was “viral marketer.” I was now creating ad campaigns on Facebook in an attempt to bring monthly active users to the site.
I had no training. I was acting on one hunch and instinct after another. Yet, I was good.
A month or two passed without incident, and then we lost a team member. Unable to withstand the workload and the move, she left to be with her boyfriend. We all made fun of her for it."
Seems like the "other side of the story" from Tess. Doesn't make her look any better...
http://theunderemployedlife.com/working-start-almost-killed-...
After our boss departed, I took over a few of his duties. One of them was “viral marketer.” I was now creating ad campaigns on Facebook in an attempt to bring monthly active users to the site.
I had no training. I was acting on one hunch and instinct after another. Yet, I was good.
A month or two passed without incident, and then we lost a team member. Unable to withstand the workload and the move, she left to be with her boyfriend. We all made fun of her for it."
Seems like the "other side of the story" from Tess. Doesn't make her look any better...
http://theunderemployedlife.com/working-start-almost-killed-...
What's crazy to me is the company didn't expect anyone to take their story public. Not even the woman in marketing.
I hope you guys continue to expose fraudulent startups and CEOs like this. It really is a service to us all.
I hope you guys continue to expose fraudulent startups and CEOs like this. It really is a service to us all.
I once worked for a startup here in boston that didn't pay me for a few months until I threatened to file a wage claim (did't work) and to quit (worked). I got the hell out of there as soon I got paid - some of my coworkers weren't so lucky.
It seems crazy to me now that I wound up in such a situation, but what it is happening to you, it is usually accompanied by a healthy helping of lies, misinformation and hope.
It wont happen again. But it was fun getting ~3 months salary in cash and going to Jordan's to buy furniture with my girlfriend like a gangsta'
It seems crazy to me now that I wound up in such a situation, but what it is happening to you, it is usually accompanied by a healthy helping of lies, misinformation and hope.
It wont happen again. But it was fun getting ~3 months salary in cash and going to Jordan's to buy furniture with my girlfriend like a gangsta'
As a cheapo freelancer born and working in a country that ranks quite low in transparency, trust and justice system ratings, I'm used to getting shafted by people who hire my services, fail to pay, and leave me with no option to turn to for help.
But I've to say I'm shocked something like that happens even in Silicon Valley, and based on other comments here, quite often too. I don't know whether to cry for my fellow shaftees or laugh at them out of cynical schadenfreude. All I can ask is please do something to fix it effectively, because the broken window effect only makes things worse with time.
But I've to say I'm shocked something like that happens even in Silicon Valley, and based on other comments here, quite often too. I don't know whether to cry for my fellow shaftees or laugh at them out of cynical schadenfreude. All I can ask is please do something to fix it effectively, because the broken window effect only makes things worse with time.
Interesting, because I saw a very similar scenario play out at the very first job I had after college. A coworker's paycheck was delayed then when the check did arrive it bounced. Coworker complained to CEO. Coworker was then fired. As a sibling comment says: this kind of thing happens often enough that everyone has seen it at least once.
Definite bonus points for the fake wire transfer receipts though. Above and beyond!
Definite bonus points for the fake wire transfer receipts though. Above and beyond!
I've dealt with late payroll before and the fear, uncertainty, and stress really sucked. I was even considering offering the company a 50% haircut on the wages that I rightfully earned already just so the stress would go away.
Is there any bank or payroll company that offers a wage escrow service? As in, the company pays X months of wages in advance into a per-employee escrow account that's FDIC insured, and the employee can log in at any time to verify its balance.
Is there any bank or payroll company that offers a wage escrow service? As in, the company pays X months of wages in advance into a per-employee escrow account that's FDIC insured, and the employee can log in at any time to verify its balance.
> The names have been changed to protect the innocent and guilty.
Assuming the writer is as scrupulously honest as they seem to be, how legally exposed would they be in actually naming names? And assuming they are exposed, are astute commenters who use clues from the article to reveal the company also liable?
It seems to me that it would be a HUGE public good to name the names. Employees and investors absolutely need the right to know about the people doing this; being able to safely expose them would go a long way to stopping such scum.
Assuming the writer is as scrupulously honest as they seem to be, how legally exposed would they be in actually naming names? And assuming they are exposed, are astute commenters who use clues from the article to reveal the company also liable?
It seems to me that it would be a HUGE public good to name the names. Employees and investors absolutely need the right to know about the people doing this; being able to safely expose them would go a long way to stopping such scum.
Has there ever been an instance of late payroll (as opposed to eg sales commission checks being calculated wrong) where the company actually pulled out of the nosedive? It seems like it's almost always the death knell.
How on earth does a shady, newly founded company with a handful of people manage to hire 8(!) H-1B workers from China?
I really feel bad for those workers. Essentially they are obeying coding slaves for the company until they eventually get their green card. They can not risk being fired, they will not ask for a raise, they can not easily switch to another job etc. etc.
A native worker like the author is less likely to put up with this kind of BS for very long.
This is unfair for both the foreign workers and native workers. Cases like this really show that the H-1B system is a total joke.
I really feel bad for those workers. Essentially they are obeying coding slaves for the company until they eventually get their green card. They can not risk being fired, they will not ask for a raise, they can not easily switch to another job etc. etc.
A native worker like the author is less likely to put up with this kind of BS for very long.
This is unfair for both the foreign workers and native workers. Cases like this really show that the H-1B system is a total joke.
This is Charlie. I met the CEO (not sharing his name, though it is in this thread) through his brother in law, Jay. Jay worked with me at a prior company. He was a data scientist and factual. He mentioned his brother in law came to Silicon Valley to do a startup having made some money as an investment banker.
As we talked, the CEO stated he is putting in $2M to fund the startup in November. In December, with $400k or so in the company with the rest coming, we started to build. We grew steadily till about April with a prototype. At which point, the CEO kept mentioning money was coming and with a few different reasons on why it did not arrive.
I bridged May and June. As the stories piled up, I started to ask more pointed questions. I met Bernie, the lawyer who was real. Bernie has an office with Montgomery McCracken in NYC. I insisted the CEO to fly twice to NYC to meet with Bernie and resolve the funding issue. On the last trip, he claimed he got a $500k loan from his lawyer, Bernie, and his cousin, Tommy. The last payroll with ADP was made.
I did not find out till the beginning of August that the money for the last payroll came from one of the employees. I thought there was $500k available starting July. It became apparent it was not available shortly thereafter.
In July, Penny joined. We went through more stress at the company with the CEO stating every other week money was coming from a variety of sources – a line of credit from Mackie Research due to his personal connections, his money making it over, and different investors. None of it came to pass.
In August, I thought it better to let some of developers go as there was no funds to pay them and ask the other ones not to come to work until money is in the bank. An investor did come in that allowed us to make July’s payroll a month late.
I did not see any of the wire transfer confirmations till later as I was showed by a couple of the employees. I did not get a confirmation personally. The team was paid for that wire transfer (July).
In August, I tried to validate his story with his brother in law with no success. I was not able to corroborate any of his story after contacting his educational institution and prior institutional employer. This lack of trust came to a head a week ago and we parted ways.
The current story from the CEO right now is that the team will get paid for August on Monday to Wednesday this week. I have no idea if it is true.
To this day, I don’t understand the game plan from the CEO. Why accelerate into a brick wall? None of it makes sense.
I am currently out the bridge, expenses, August office rent and back pay.
It never occurred to me, till too late, that somebody would misrepresent so much of his story. For being naïve and believing in the dream, I am truly sorry.
As we talked, the CEO stated he is putting in $2M to fund the startup in November. In December, with $400k or so in the company with the rest coming, we started to build. We grew steadily till about April with a prototype. At which point, the CEO kept mentioning money was coming and with a few different reasons on why it did not arrive.
I bridged May and June. As the stories piled up, I started to ask more pointed questions. I met Bernie, the lawyer who was real. Bernie has an office with Montgomery McCracken in NYC. I insisted the CEO to fly twice to NYC to meet with Bernie and resolve the funding issue. On the last trip, he claimed he got a $500k loan from his lawyer, Bernie, and his cousin, Tommy. The last payroll with ADP was made.
I did not find out till the beginning of August that the money for the last payroll came from one of the employees. I thought there was $500k available starting July. It became apparent it was not available shortly thereafter.
In July, Penny joined. We went through more stress at the company with the CEO stating every other week money was coming from a variety of sources – a line of credit from Mackie Research due to his personal connections, his money making it over, and different investors. None of it came to pass.
In August, I thought it better to let some of developers go as there was no funds to pay them and ask the other ones not to come to work until money is in the bank. An investor did come in that allowed us to make July’s payroll a month late.
I did not see any of the wire transfer confirmations till later as I was showed by a couple of the employees. I did not get a confirmation personally. The team was paid for that wire transfer (July).
In August, I tried to validate his story with his brother in law with no success. I was not able to corroborate any of his story after contacting his educational institution and prior institutional employer. This lack of trust came to a head a week ago and we parted ways.
The current story from the CEO right now is that the team will get paid for August on Monday to Wednesday this week. I have no idea if it is true.
To this day, I don’t understand the game plan from the CEO. Why accelerate into a brick wall? None of it makes sense.
I am currently out the bridge, expenses, August office rent and back pay.
It never occurred to me, till too late, that somebody would misrepresent so much of his story. For being naïve and believing in the dream, I am truly sorry.
>Michael said under his breath in our second language, “Look at those Chinese kids. They’re pretty happy they got paid, huh?”
Kim (the writer) is a korean last name, is the company CEO korean too?
Kim (the writer) is a korean last name, is the company CEO korean too?
lol, WrkRiot just posted this response
https://www.facebook.com/WrkRiot/?hc_ref=SEARCH&fref=nf
WrkRiot is considering legal action against a disgruntled former employee who has launched a slanderous campaign against WrkRiot and some of its employees via social media. While it is not our policy to discuss personnel matters, we want to make it clear that this former employee was fired for cause. Signed affidavits from current employees attest to this former employee’s failure to perform her required duties in the workplace. In addition, they attest to her participation in an attempt to undermine or oust certain members of management. This former employee demanded a sum of $50,000 upon her departure. Under no verbal agreement, contract or any other type of covenant was this person entitled to such a sum. After learning that WrkRiot would not pay what it considered extortion money, this former employee began her campaign of slanderous of activity over the Internet. WrkRiot believes this former employee’s writings have led to dangerous situations for many of our employees through the leaking of personal information and through threats being made over social media from others who have taken the former employee’s misinformation as truth. We regret having to spend time and effort on this when there is so much to do in the development of our unique application. However, we want to make it abundantly clear that the slanderous writings of a disgruntled former employee do not represent the truth about WrkRiot, its management or workforce. The racist, sexist and abusive comments our employees have received are inexcusable. Further, we want to make it clear that we will seek any and all legal remedies to end this campaign of slander.
WrkRiot is considering legal action against a disgruntled former employee who has launched a slanderous campaign against WrkRiot and some of its employees via social media. While it is not our policy to discuss personnel matters, we want to make it clear that this former employee was fired for cause. Signed affidavits from current employees attest to this former employee’s failure to perform her required duties in the workplace. In addition, they attest to her participation in an attempt to undermine or oust certain members of management. This former employee demanded a sum of $50,000 upon her departure. Under no verbal agreement, contract or any other type of covenant was this person entitled to such a sum. After learning that WrkRiot would not pay what it considered extortion money, this former employee began her campaign of slanderous of activity over the Internet. WrkRiot believes this former employee’s writings have led to dangerous situations for many of our employees through the leaking of personal information and through threats being made over social media from others who have taken the former employee’s misinformation as truth. We regret having to spend time and effort on this when there is so much to do in the development of our unique application. However, we want to make it abundantly clear that the slanderous writings of a disgruntled former employee do not represent the truth about WrkRiot, its management or workforce. The racist, sexist and abusive comments our employees have received are inexcusable. Further, we want to make it clear that we will seek any and all legal remedies to end this campaign of slander.
I'm curious what the "H1Bs cannot be used to control employees because H1Bs have a process to move to another company" crowd thinks of this situation.
This must have been a traumatizing experience but the one thing I would want to add to it based upon my own experience is that things don't get that much better at the unicorns. Having worked for one that's still chugging along, I've seen the fake-it-til-you-make-it paradigm persist well into the 'mature' phase of a company. The industry at large feels like such a house of cards. It's not that value isn't being generated, but rather that it has been so dramatically overvalued.
The reason she did not see the red flags is because that's what being conned looks like. They don't call them con artist for nothing, and he seems up the chain on mastery.
If I'm understanding the article correctly this goes beyond not getting paid because the CEO is juggling accounts - the Wells Fargo thing is probably criminal.
How did a company with 17 employees manage to get 9 H1Bs?
Sunshine is the best medicine https://twitter.com/WrkRiot/status/767449617071878144
Singaporean startup founder here who moved from the US. I have yet to meet a psychopathic CEO here in Singapore, but I've met and heard about quite a few in Silicon Valley / Bay Area. It may just be selection bias (a lot more companies are founded in the Bay Area) but I wonder if there's something more. Any other insights into Bay Area startups vs. international startups here?
"Sunshine is the best disinfectant."
This might be counterproductive in some instances, but if something doesn't smell right, I'll try to blow it up and make all the dealings very public.
I mean, there are no personal feelings involved. You are paying me to be a worker. No pay? No work.
This might be counterproductive in some instances, but if something doesn't smell right, I'll try to blow it up and make all the dealings very public.
I mean, there are no personal feelings involved. You are paying me to be a worker. No pay? No work.
Shaka, and the walls fell.
It looks like the rats are fleeing the ship:
https://medium.com/@dtunkelang/lesson-learned-ab0dc6723b8c#....
It looks like the rats are fleeing the ship:
https://medium.com/@dtunkelang/lesson-learned-ab0dc6723b8c#....
Someone from that area might want to contact the local DA's office:
http://sfdistrictattorney.org/contact-us
Isn't the photoshopped wire transfer literally outright criminal fraud? The government should move fast and break him.
I've never heard of a startup going that far.