Golden: Bill Maris of Google Ventures compares Secret founders to bank robbers
When anonymous messaging app Secret shut its doors last week, one aspect of the story that stood out was that the two founders of the startup had cashed out $6 million in shares prior to its closure, with one founder, Secret Chief Executive Officer David Byttow, having used part of his share to purchase a Ferrari.
Most reasonable people would think this is dubious: legal, for sure, but none the less not something that most founders of a relatively young startup would do.
As it turns out, Bill Maris of Google Ventures, an investor in Secret, happens to agree.
In an interview with The New York Times Tuesday, Maris compared the founders to banker robbers, particularly given the $25 million round the founders pocketed the money from was advised against.
“We advised them against it … And raising that much money that soon, it was going to be impossible to meet the expectations in the future,” Maris said.
“It’s like a bank heist … that’s not how you do a startup.”
Will all the funds be returned to investors?
When the announcement of the closure of Secret was made, Byttow promised to return any unused funds to investors, but made no indication as to whether he would return the $3 million he’d taken, something Maris believes should be part of the mix.
“I think they should return all the money,” he said. “Some went to taxes, some went to a red Ferrari, which is apparently now sold.”
Because you can never fairly put the boot into more deserving people, Maris kept going, noting that the two founders, despite being ex-Google employees, were not “Google-y.”
“It was so egregious and so obvious that our values were not aligned,” he said. “They hadn’t done anything. They got some press. They hadn’t built anything sustainable.”
Golden
Despite fierce competition among Silicon Valley startups, there’s usually some sort of unwritten gentleman’s agreement that VC’s don’t attack founders when startups fail, in part because failure is seen (some would argue bizarrely) as a stepping stone along the path to success among those with offices on Sand Hill Road.
At least it would appear that way because rarely, if ever, do you see a VC come out and speak the truth like Bill Maris has done on Google’s investment in Secret.
Perhaps it’s more a case of going too far in abusing venture capital that has caused Maris to go public, but whatever the reason, it’s golden, and there should be more of it.
One final hat tip to startup founders: It’s not a great look to part cash out and buy a Ferrari so early in your company’s life, particularly when the company never had a working plan to make money in the first place.
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