
Munchery swindled a group of women and minority owned companies out of over $50k - DesaiAshu
https://medium.com/@lenoreestrada/munchery-how-a-venture-backed-startup-swindled-a-group-of-women-and-minority-owned-companies-out-e64ee610511b
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mc32
When companies go under, some people are left holding the bag. It’s part of
business. This risk (terms) has brought many a business down. It sucks, but it
should not be a surprise. Take no risk and make no money.

Lesson, you win some, you lose some.

There’s nothing personal in it. Complaining about it makes as much sense as
being embarrassed to make a profit.

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tareqak
Munchery could have done much better here on at least two counts.

1) Letting their vendors know that they are shutting down (Munchery didn't
even send an email to their vendors, but they did to their customers as
mentioned in the article).

2) As part of 1), cancelling existing orders with existing vendors.

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nanyt0618
According to several former employees, Munchery also stiffed vendors in LA and
Seattle when they shut down there years ago. Some of them have still not been
paid, even though Munchery raised more money and continued to operate in San
Francisco. A vendor in LA was owed 150k, Munchery agreed to a payment plan,
and then just stopped paying when they still owed 100k. This is a pattern of
not paying bills and continuing to rack up debts without the money to pay it
off. The companies that delivered their goods to Munchery as promised
shouldn't have to pay for Munchery's dishonesty and poor management.

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luckylion
I fail to see how the gender or ethnicity of the company owners is relevant
here. Would Munchery's behavior be okay if it was about a bakery owned by
three white men?

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tareqak
Direct quote from the article: In a particularly damning missive, one person
claiming to be a former employee wrote in to describe the systematic refusal
to pay small, women-owned businesses as they had fewer resources to fight
back.

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luckylion
So anonymous hear-say is all there is?

And is the company even small? "Some of our bigger customers purchase up to
$15,000/week with us" sounds like they make > $100k revenue/week regularly,
baking thousands and thousands of cakes every week. I don't know SF standards
of small, but that sounds like a solid operation to me - one that definitely
has the resources to go after a corporate client that doesn't pay.

I still find it weird to focus on gender/sex and ethnicity, and I have my
doubts that Munchery invested a lot of time & money into finding out who is
behind the companies they don't pay and what the owners' gender is.

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zorpner
Yes, it's clear that you don't believe the woman whose business was impacted,
and choose to side with the VC-funded company that stiffed their vendors. You
could just say that, rather than pretend to have a bunch of concerns about
discourse, and save us all a lot of time.

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luckylion
I don't know where I hurt your feelings, but I'm sorry.

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guest2457533
Ok, so bad for everyone involved. So what the takeaway here? How do you
protect yourself as a small business owner from this type of risk?

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sorokod
Start by naming and shaming. Its not much but there you go:

* CEO James Beriker

* investors Sherpa Capital and Menlo Ventures

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gentle
It sounds like Munchery was run by morons who should never get the chance to
run a company again

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klyrs
truly, this should be a privilege and not a right.

