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.
Furthermore, Canadians do not apologize for everything. I know plenty who never apologize for anything.
Also, a little more ranting about Bootup labs, there are way too many programs like this that are actually credible. I encourage all who are thinking of applying to their program to strongly consider otherwise. If you can't get into another better incubation program, it means your idea needs more work. I haven't seen anything positive from bootup labs and I can't say anything positive about the leadership behind bootup labs -- this was true way before this very revealing incident.
Any entrepreneur considering joining the bootup labs program is better served to keep their day jobs and bootstrap their company without bootup labs. Please, stay far far away.
Most of us are really sorry about this. A few of us take ourselves far too seriously.
Any entrepreneur considering joining the bootup labs program is better served to keep their day jobs and bootstrap their company without bootup labs.
For what it's worth, I considered Bootup Labs and decided that I was better off continuing to bootstrap -- but I'm not sure that what was best for me is necessarily best for all startup founders.
Even after contacting them it never felt right and we passed. I really feel for these guy, that could have been us.
If anything, Vancouver has benefited from this because it is now more likely that Bootup Labs will be booted out of Vancouver. Bootup labs has been hurting the startup community in Vancouver for quite some time and it will help the environment there if this kind of sour leadership is forced out of town.
Let me be clear, I'm not sorry this happened to Bootup. I'm sorry because I don't want anyone to think bad of our city because of an event like this.
Bootup can close down tomorrow for all I care. I take it personally when a fellow entrepreneur (and HN user) gets screwed over, and especially when it happened in my city.
Believe me when I say the whole tech community here feels awful about this. Don't let it sour you on our city!
You have no idea how depressing it is to live a stone's throw away in Seattle - it's like wallowing in a pit of mud right outside the gates to Eden. No offense to Seattleites, but your city blows in comparison.
Allow me to note something. As a Canadian and a Vancouverite.
While I do not particularly like Bootup Labs for a variety of reasons, I cannot say that I believe either side of the story and that I can form an objective opinion. For this reason I find it strange that you take it on yourself to apologize on my behalf.
But aside from that -- even from what Bootup Labs is saying, this situation is very unfortunate for the status.ly founders and something I hope nobody else has to go through.
And this is a hang over from your British heritage.
Sorry about that. :-)
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.
[Taxi driver takes customer 4 miles, throws him out of the cab in a bad neighborhood to pick up a more profitable customer, and drives away. Customer flips off driver as he speeds away.]
Driver, yelling out of window: "What are you complaining about? I took you 4 miles and didn't even charge you!!"
I apologize that you feel like I'm twisting the truth.
It was the last week in January until the end of last Month. While we were there 3 months of the year, you are correct 2 months would be more accurate,
I was just getting the $100k off of the Bootup website, I understood that we got $150k, but that $50k went back to Bootup, is that not what the original terms were?
You did pay our rent and our legal fees to get incorporated. I mentioned the rent, but I didn't mention the legal fees. I apologize.
I didn't suggest that Bootup was closing down or was out of money.
I wouldn't suggest that I got the better end of the deal as it was extremely expensive to move to and live in Vancouver.
I wish you all well.
The title of this posting is "Moved to Canada to participate in a startup incubator that had no money"...
Soory you guys have had ahard time, Hope this experience doesn't scare too many other people off doing startups in vancouver or coming here to start a business
It's often too easy to jump to the wrong conclusion... but I'm struggling to see a decent explanation for this. And anything less than a full apology is a huge red flag.
So instead of honoring their word they choose to take the money. Very poor business practice IMO.
we received nothing in return.
Isn't the whole point of these programs to enable founders to do their thing in an environment they can't find anywhere else?
If you're expected to manage a project and provide deliverables over a timeline, why not just go out and find a customer? You get to keep all their money and all your equity. And you still get to advance your product.
If, on the other hand, you want to develop a game changer, uncontrained by customer demands, you save up or take investment and go to your lab. Your are no longer a developer; you are an inventor. Sure, everyone wants to show progress, but not at the expense of pursuing the breakthroughs you will need to hit the home run desired by your investor(s).
Investors, if you want a home run from your founders, you may just have to wait a while for the baby to gestate. Expecting "something in return" in the first 2 months of a 10 month program is an unreasonable expectation IMO. Just do your share and get out of the way.
You know, there are any number of people in the city I live in who are quite willing and able waste a few months of my life, drain my bank balances and crush my spirit without asking me to move to another city in another country.
In the long term the introductions might be useful but they are they only upside I see in this whole situation.
Agreed with DanBlake: "Wow".
This is a common tactic of a con-artist and or sociopath. They try to deflect back onto the one drawing attention for two purposes. One to discredit the one lodging complaint and two to try and strong arm the more passive party into silence.
Humans, as a general rule of thumb, dislike conflict. You can see it in Jamie's responses where he is still apologetic to these guys, when logic would dictate that he should want their head on a platter.
Sociopaths see human responses such as this, like an artist sees a completed painting on a blank canvas, and they will use it against you. When I read that line quoted above, I realized right then that Dan is most-likely a sociopath and a person to be avoided.
"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.
Someone introduced me to a bootup labs person and within just a few sentences I knew these characters were to be avoided. It is difficult for me to rationalize these feelings in ways that can help stop the bad future I see that makes me have these feelings. I don't want to share the feelings, because they are just feelings. I try to only share opinions I can rationalize, because I don't want to be wrong about a negative feeling if the person is actually good and I'm wrong in my assessment.
It's like when I interacted with them, I saw how the compounding negativity of their influence was going to affect the startup community in Vancouver. My feeling made me want to stay far, far away from anyone involved in bootup labs or involved with them or their "groups". I want a good group to be seen as the leader in Vancouver, but it's almost like the stage has been set there and it was designed by bootup labs.
I don't know where the impressions like these come from. I don't know why I have them or how exactly I knew bootup labs was going to turn out badly.
In Texas, there is a saying, "All hat and no cattle." I don't know if there is a similar expression in BC or not, but it's like I can tell that what they were saying was intended to "sell" those who simply didn't know enough to steer clear of them. The bootup labs people are great at sales and giving the impression of power, certainty, and success -- but I never saw any of it.
I want to help people steer clear of individuals like this, but people who say negative stuff about others are often themselves looked down upon. Moms say, "If you don't have something nice to say, don't say anything at all." Well, sometimes, keeping your mouth shut can itself have negative repercussions.
As someone who is still struggling with how to properly behave in social situations, how am I to react when I am confronted by a situation like this?
I was involved years ago with a group of individuals in a different industry. We were working on some advanced machine learning stuff. It was really cool, and the tech was going somewhere. We were getting market interest too from some big players.
I ended up cutting and walking away. Basically I burned several years of work in the process (I designed almost all the tech), and was left with debts that I'm just now getting rid of.
Getting away from the folks I was working with was worth more to me than any of the possibilities that were on the horizon. I also had a strong feeling that if it was a success that I would see none of it, so there was a bit of plain old self-interest too.
"All hat and no cattle" is pretty good. The one guy running the whole thing was, I think, a pure psychopath. I was actually afraid of him for a while, thinking that he might come some night and kill me and my family.
He was charismatic as hell and really, really good at projecting an aura of limitless success and at getting people interested, but nothing ever panned out. He was surrounded by slimy opportunists and clueless followers. I was one of the latter for a while. He had a way of stroking your ego and making you feel powerful, when really you were just being used.
Since then, I now have a real sense for such people and such arrangements and can sort of smell them. Like you, I can't really describe it. It's a bit of too-good-to-be-true and a bit of too-slick and a bit of... some ancient animal threat response.
I've never been to Vancouver or met any of the principals involved in this story, so I really can't comment directly. But your "sense" may indeed be accurate. I sure know that smell now.
Unfortunately, the startup world and the larger tech industry is absolutely crawling with these reptiles.
My advice? Just steer clear. You can't really do much else. You can't go around badmouthing people, as it just makes you sound like a jerk and could also attract legal harassment. Surround yourself with people who aren't slimy, and avoid even those who are unfortunate enough to be in the orbit of slimeballs. All you can really do for people like them (and like I was years ago!) is to wait and hope they come to their senses. If they are your friends, you might be able to tell them or hint at them... but it's really just as bad as when someone you know is dating someone awful.
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.
I'm not trying to be a dick, but when you burn people (even unintentionally or with the best of intentions), it makes it harder for everyone else to do deals.
That goes beyond just being embarrassing.
Not to be facetious, but: A program which doesn't have as much money as they're offering people.
The founders of Bootup Labs put some of their own money in, but they're raising money (or trying, at least) from VCs for the rest. They're paying themselves [EDIT: or not -- see reply from dannyrobinson below] from the $50k/startup management fee, not just from expected future profits.
Are there any other startup accelerators which do things this way? I'm not aware of any.
It's a very effective way of protecting themselves from downside risk -- if all the startups bomb, the startup founder have nothing and the investors have nothing, but Bootup Labs still has their $50k/startup -- which might be part of the reason why they've had trouble convincing VCs to invest. I think many VCs would be skeptical of a startup CEO who said "we have no revenue and a completely untested business model, but we're going to pay ourselves $100k salaries with your money".
Either sell me a service or give me cash for equity. Don't do both.
It's weirder here due to the small scale of investment relative to the costs, and the non-cash services, but not totally implausible.
My impression from reading all of this is that Bootup Labs is a scam. At best, they have a significant conflict of interest at the heart of their business model.
Now if Statusly was only in the program for 2 out of the 8 months, then it seems like the founders could be owed around $35k (50k2/8.95) for the money that they paid to be in the program for the rest of the 6 months.
Should this turn out to not be the truth, even the slightest unintentional misappropriation of funds for a pizza could end up costing your company a great deal.
Maybe I've been around the gringos too long.....
My apologies. I had understood that you were drawing a salary from Bootup Labs based on a conversation I had with Boris a few months ago, but I can't remember exactly what he said, and it's quite possible that I misinterpreted him.
Even if you're not personally getting paid anything, I think $50k is a rather generous fee given that other startup accelerators don't seem to need any such fee at all.
At this rate, what do you care if the startup succeeds or fails? You get $50k no matter what.
I can't fathom how you think this is a good deal for anyone but you. This kind of behavior is why vancouver will be better without you.
The way it works is that you get 50% of your R&D expenses back from the gov't, in cash, several months later. To claim it, you have to write reports explaining the R&D value of each project. Besides the obvious bureaucratic overhead, it ends up affecting the organizational structure of the company. It distorts the way the business is run, maybe by only 20%, but that's enough to make you lose in the market in the long run.
I used to work at a startup that makes no money at all. They asked me to sign some sort of "fake" stock options as part of the SR&ED requirements. Of course the numbers were meaningless (pennies or whatnot). So I'm very interested on how this works.
What if the startup is a one-man show, making money and start to pay himself? Sort of like owner-but-paid-annually? (Or maybe a one-man consultant).
So let me get this straight, let's say a startup has 4 employees and each employee got paid $50k annually. When the SR&ED is done correctly, the owner can get at least 50% back from the salary alone?
Can rent be substituted as mortgage (say working on your own garage)?
Oh -- hardware purchases and the like don't count, and you have to be able to prove the salary was paid, so as far as I know there is no game to be played with stock options.
Odd, we got to put the entire amount of the Tesla grid that we put together towards the SRED credits. Having said that I just filled out the paper work and handed it to the lawyers and accountants, perhaps they took it off afterwords?
$50K for 8 months is a lot of rent and accounting services.
If the Management Fee pays for the managers' salaries, like Danny and Boris Wertz, then they are not necessarily incentivized to have quality startups in each cohort... more important to Bootup in that circumstance is having enough startups to cover their overhead in each 8 month cycle.
I'm not trying to suggest that Bootup Labs is bankrupt or anything, I apologize.
I think we all understood that, given that your post mentioned that 3 of the 7 companies in the cohort were not being cut loose.
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.
It's a bad idea to slight individuals you don't know anything about just because you think they belong to a generic 'VC' category.
I hear you when you say it's bad to slight individuals you don't know anything about. I am very familiar with Boris Wertz (through multiple friends of friends) and the good he has done for the small Vancouver tech scene. However, this is a massive blow in the effort to encourage tech companies to establish a presence in Vancouver (effecting the Vancouver VC recruiting pool). Some other city will be drinking Vancouver's Milkshake.
It's a good thing, too. While their misfortune has certainly hurt people, myself included, Bootup is a great addition to the Vancouver startup ecosystem. 3 new companies is far better than 0 in my books. They also throw fantastic events and mentor many more entrepreneurs than they fund.
I was trying to put together a real-estate deal for a Bootup coworking space in December, but in January - when I assume the funding round fell apart - Boris (Mann) became quite scarce. I'm over it. They took on an uphill battle and are hustling to keep the business alive. I think they deserve credit for surviving when others might have folded. As a member of the Vancouver startup community, I'm happy to still have them around. Anyone who has met Boris or Danny can tell that they are genuine in their passion for entrepreneurship and wouldn't have done this if it wasn't strictly necessary. They also have built a kickass portfolio of companies in a short time.
VERY bold statement.
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?
Perhaps a bit unprofessional, but I'm personally glad it happens. The startup/VC world is all about reputation, and anything which moves the world from "talk to your friends at other startups and find out if they know anything about X" to "google for X and find out what people are saying about it" is a good thing for startups who are less than fully connected in the gossip network. Think of this as the natural continuation of what thefunded started.
Of course, as a Vancouverite I'm sad that it's Bootup Labs which is getting a bad reputation like this. :-/
So many startup folks are attracted to these kinds of programs because I think they mimic the illusion of safety that school offered. You have to be "accepted" and it's not a venture but a "program". Everything is geared towards creating this sense of safety without pointing out you are giving up a lot for it. Know why these programs want to save you the hassle of doing your own incorporation paperwork that took me a day to figure out when I was a teenager? Because they have to put clauses in that will help them, not you.
Again, I'm not saying these ventures are sinister. But you can get by without them and in fact may become a better business person for it.
Google the history of Spinway, bankruptcy, then sold, Peerflix-a VC fire sale, Bryght-private sale for loss then shut down.
Honestly, if I where in their situation I probably would have done the same thing, not because I'm dumb or naive or unaware of the risks, but simply because, fuck it, life is too short to always do the dull and sensible thing. And who knows, it might end up being awesome.
If there had been only three start ups and 0 money then the situation as far as those three startups is concerned would be exactly the same.
It's not for them to look in to the bank accounts of their investors, but if you're not getting what is promised then 'you have no money' turned out to be a pretty good guess at the state of affairs. "Not enough money" would have been more accurate though.
Sorry to hear about your experience.
I would hope day to day business decisions at Bootup are not done in the same manner. It is ,at best, completely unprofessional.
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.
How to Burn Bridges with Bootup Labs and Other Investors
Sounds more like the hand that called the dog over with promises of bacon that wasn't there...
And they mentioned Robinson's "This is not how it went down" comment without the main substance of his post (which consisted only of small quibbles) -- or the responses to it.
And does the fact that there was a "a heavy hitting roster" backing Bootup make what was done any more excusable?
They're only investors if they actually invest money.
Not exactly solid reporting :(
It ain't real 'till the money's in the bank.
I'm just in survival mode at the moment, living on my parent's couch at the moment with negative money in my bank account. I need to sell some things to try to get back on my feet again - that's why I'm seeing if I can sell these domains.
My suggestion (for what it's worth) is that you put this behind you and find a way to make it happen. If you choose not to, you probably weren't going to make a go of it anyway.
You got a raw deal, and that's clear to anyone. Now get back to work on your startup. This can be a roadblock or a speedbump; you choose.
Isn't this just the sort of test we've all faced at some point in our startup efforts?
I don't find it too useful to think this way. In the end, our time ain't worth jack. Solving customers' problems is where value comes from. If 4-6 man-months was put toward something that didn't solve anyone's problem, then it's worth $0.
Disclosure: Boris Wertz is an investor in Techvibes Media Inc.
I doubt Boris Wertz pulled any strings to get the positive spin from Techvibes -- my impression is that Techvibes would find a way to give a positive spin to "meteor headed for Vancouver, is expected to destroy city".
> HI all: we're moving up the blog post we were going to put up tomorrow to this eve - please stand by
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]
Gaming the tax credits seems like it takes a bit of effort, but lowers the effective tax rate substantially below even Nevada.
Starting businesses is easy as pie. If you have enough money to sustain the business before it brings in revenue then I'm not sure what the attraction is to these sort of ventures. If your execution is good then VCs will hear you out regardless of whether you've been "accepted" into a program like this. They may facilitate introductions but there are also government funded programs here in Canada that do not charge money which will do the same.
Tax rates for people smart enough to start businesses in Canada are fairly attractive. It is especially so when you factor in healthcare costs or lack-there-of. However one thing to bear in mind is that it is often a severe hassle an American company to exit an investment in a Canadian company. In some cases it would require 900 signatures of limited partners in the American company and for each to file Canadian income taxes. Google "Section 116 foreign investment". It is something the government here is tackling in a bid to spur VC investment in Canada. But there are still some gotchas (and benefits) to starting a company here.
2) I like the idea of accelerators for people with $0 and just out of college or high school, or who need structure. If I could give 5% of my company to give an accelerator a win (both in money upside and reputation), I'd do it, especially if I were in a third-tier city like Vancouver which deserves a second tier startup population.
I think the odds of failure at 50-80%, including my own company, and having a bunch of ready ways to re-deploy those people into other projects is good for EVERYONE -- the engineers can move to the most successful projects. If I worked on something for a year or two and it flopped, I'd love to go work at a startup I'd been following the whole time, rather than trying to find a regular job.
I think SFBA in general is basically an incubator/accelerator, if you've been involved in one startup even as an engineer. Formal accelerators help a lot more in places where most of the people who want to do a startup have NOT yet worked for one. College would be the best example.
Good luck and is the weather in Phoenix still "100 and above it's a scorcher out there" :) ? You emailed me this summer re: my start-up. Good luck!
So yeah - downvoted for personal reasons ;)
Good luck to the guys.
Bad situations always leave room for learning, growth and positive outcomes, so long as you are willing to look at it from a positive perspective.
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.