Re:SnapTalent (YC W08) Shuts Down
by ynniv on Monday August 17, 2009 @03:46PM
(#768902)
Why is it classy to throw in the towel? The letter doesn't suggest that investors asked for their money back. This is the worst case scenario given my understanding of the VC market. It sounds like the team has lost their momentum, but certainly they have learned something in the process. If they dissolve the company and start something new which becomes successful, the original investors get nothing. There's nothing wrong with that from a morality perspective, but don't assume that investors want their money back - their reasons for investing might be complex.
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I agree it's pretty rare to see a company fold before the money gives out. I suspect the "opportunity cost" which is mentioned in passing was probably a significant factor.
Re:SnapTalent (YC W08) Shuts Down
by jasonlbaptiste on Monday August 17, 2009 @04:28PM
(#769017)
They had two years in the bank. They knew the risks and the likelihood of what would have happened. They could have been paid themselves for 2 years, tried a lot of different things, and potentially wasted the money. That is how it usually goes. Instead they cut their losses. I'm pretty sure the investors would rather have their money back than nothing at all.
By "they", I assume that you meant the founders. Did the founders have personal losses to be cut?
> I'm pretty sure the investors would rather have their money back than nothing at all.
Did you ask them? Are you yourself a VC investor? Its rather possible that investors saw promising talent and wanted to buy 2 years of their time.
The investors could have said "No, keep the money, do something else." Who would turn that down?