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.