

Union Sq ventures to lead $10m investment in Dwolla - asanwal
http://www.betabeat.com/2012/01/20/union-square-ventures-leading-series-b-in-iowa-based-dwolla/

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dangrossman
I still don't see how Dwolla is different than a young PayPal. PayPal has
offered free, ACH-funded person-to-person payments for 12 years. You only
start getting charged 2.9% when you upgrade to accept credit cards; PayPal
could drop the fee for ACH-funded payments any time they want to undercut
Dwolla.

What is Union Square Ventures betting on?

~~~
noahc
Dwolla is different because they're not building a PayPal, their building a
Visa. Long term that's their vision. That's what USV is betting on that
someday you'll be paying with Dwolla at Walmart.

~~~
gergles
Yet PayPal is already doing that too.

[http://www.chicagotribune.com/business/breaking/chi-
paypal-t...](http://www.chicagotribune.com/business/breaking/chi-paypal-tests-
instore-payments-with-home-depot-20120106,0,3058955.story)

~~~
noahc
Exactly, they both see the end game.

When I referenced Paypal, I meant it in terms of what we traditionally think
of as Paypals core business which is online payments made via checks, credit
cards, and debit cards.

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citricsquid
I'm not in the US so I can't sign up and see how it works, but from what I
understand they're more of a "virtual" bank account (like Paypal) but
_without_ the ability to use credit / debit cards? So they're competing with
wepay and not Paypal?

~~~
troymc
Not exactly. Check out the Dwolla FAQ:

[http://help.dwolla.com/customer/portal/articles/87210-dwolla...](http://help.dwolla.com/customer/portal/articles/87210-dwolla-
faq)

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djb_hackernews
It's as if they stumbled upon the hype from a few months ago...

What USV wants, USV gets.

~~~
suking
Didn't they get roped right into turntable.fm too?

<http://siteanalytics.compete.com/turntable.fm/>

~~~
jedc
I think a good chunk of the huge step down is when they made it US-only for
licensing issues. I was an avid UK user until that time.

~~~
suking
I don't know anyone who uses it in US. Must be a SV thing - who knows.
Definitely not the trend I'd like to see though if I invested at that peak.

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loceng
Great for consumers, deadly for certain businesses' profits.

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thinkcomp
I still don't understand how Dwolla is exempt from money transmission laws or
why any investor would want to assume criminal liability.

18 U.S.C. 1960(a): "Whoever knowingly conducts, controls, manages, supervises,
directs, or _owns all or part_ of an unlicensed money transmitting business,
shall be fined in accordance with this title or imprisoned not more than 5
years, or both."

<http://www.plainsite.org/browse/index.html?id=14426>

~~~
noahc
My understanding is that they are using a bank to front this, thus some legal
thinkers see this as not being exempt. You already know this though.

I've seen you post in MULTIPLE threads about Dwolla and bit coin. Please stop.
I've held my tongue for so long justifying it with "he has a valid point" or
"maybe he is on to something"

The truth of that matter is you come across as bitter and you are pissing all
over your reputation. They found a way to operate in a way you didn't think of
so you filed suit against them and now are on a smear campaign to destroy
them.

I promise you what you're doing will not stop them and only makes me and
others think you are very bitter about the whole ordeal.

Please read PG's recent essay on resourcefulness. Think about how it applies
to you. If I were in your shoes, I'd consider adopting their strategy (it's
working after all!) and trying to out innovate them on the front end instead
of trying to use smear campaigns and legal action to prevent innovation in a
system we so desperately need.

~~~
thinkcomp
You may not fully understand the situation based on what you wrote. My company
is suing California, not Dwolla. You cannot just start doing business in a
state where you are suing the same regulators who have already threatened you
with jail time for doing business. This isn't a matter of out-innovating.

The clever manner that Dwolla found to get around the law was to break it and
ignore it and hope no one would notice. That's why I think it's worth writing
about.

If my lawsuit against California is successful, then my company and Dwolla
will be able to compete on a level playing field, which is the ideal
situation. The lawsuit isn't designed to prevent innovation, it's designed to
allow it.

So as you can see, you have the entire situation backwards. Instead of telling
me to stop (which I won't, because I'm as entitled to voice my opinion about
these laws and the way companies are skirting them as everyone else was to
voice their respective opinions about SOPA), some support would be nice. Maybe
your company would like to get into payments one day, too, and if so you
shouldn't have to run the risk of jail or being shut down arbitrarily.

~~~
noahc
You are probably correct in that I don't doubt you that I got that detail
wrong. I'm sorry I got these details wrong, but I still think my point stands.

Aaron, I'm giving you support through tough love. I'm telling you that the way
you show up on these threads and behave isn't doing you any favors. That's
all.

I appreciate the effort to campaign for this -- long term it's probably a good
thing for startups assuming you can set the right precedent.

However, it goes back to the resourcefulness bit, in the long term my money is
on Dwolla succeeding because they are focused on building stuff and skirting
the regulation. I know you've had issues getting VC money, and I think this is
why.

I'm not trying to start a flame war, just some suggestions on how you appear
to the HN population. I wish you the best of luck, and if nothing else you're
very persistent.

~~~
thinkcomp
Understood. Nonetheless, I draw a distinction between "resourcefulness" and
willingness to break the law, in this situation and others.

