Recently, I wrote a post called “Entrepreneurs Deserve Full Transparency” for my WSJ series. Several entrepreneurs wrote me, but this story really stands out as a warning to do your diligence and demand full transparency. Not all accelerators are created equal.
I’ve posted the following email by permission of the author, who shall remain anonymous as his request. However, I can tell you that I checked this person out and they are completely legitimate and have a strong reputation in their own community. So while you can’t believe everything you read, I have done the work necessary to convince myself that this comes from someone who is very credible.
TL;DR? Do your diligence on accelerators! Want more? Read on, and be amazed.
In brackets [ ] are areas I have redacted to preserve anonymity, but have substituted the “gist” without changing the meaning, as approved by the author. I may have also changed the gender of certain people (i.e. he/she), again, with approval of the author.
I guess I should preface this by saying we haven’t publicly addressed this and we’re not sure if we want to but this story starts like most in the startup world. My startup applies to an accelerator and gets in. It’s not our first rodeo, as we’d graduated from [name of an unrelated accelerator] but we wanted and needed some support around our vertical. We paused because it was an inaugural cohort but being that it was vertical-specific and the managing director worked for a highly lauded startup in our vertical, we decided to go for it. ([a hint about which accelerator it was]). The offer was standard, [specific financial deal in line with the market]. It was a bit of a hit for our progress, but we decide it’s the price of access so we pack up and headed to [name of city].
After settling in, we went over to the space which was billed as campus, community, accelerator, and more. We arrived at the address only to find that it is a co-working space. There is no dedicated space to work or store any equipment/materials which seems strange for a “campus” but we went with it because we preferred to work from home anyway.
We ask about the funding, we find out that the investment suddenly isn’t coming from the accelerator. It is coming from a seed stage VC and suddenly the amount of that investment has a range. Everyone was promised $[redacted]K but some companies are low-balled with $[$10,000 less than the previous number], which barely covers rent in [name of city]. We’re also told that those funds are dependent on meeting with the VC and, at the end, we’re told that we need to be C corps before they’ll wire the funds. Not a problem but it would have been nice to know since we had more than a month between being accepted and moving to [name of city] and we could have handled it but it shouldn’t be a problem because they’ve lined up free legal services for us.
After getting paired with our attorney and told she’s amazing, I call her and after a week or so of waiting to get in a call, she lays out the path forward, she asks me for a retainer of $[redacted]. I tell her I’ll get back to her because I think something was lost in translation. I call the MD of the program and the same person who was just praising the attorney calls her a shark and says “how dare she try to charge after offering her services for free”. I get a assigned a new attorney who thankfully does the work gratis. It takes almost 3 weeks to get it all done.
At this point, we’re thinking that the best we can do is network and expect every gain to be on the strength of our team since the accelerator has failed in execution and transparency every step of the way thus far. The value in continuing was the thought that at least we’d get access to to the founders of that influential startup that the MD worked for and there are supposed to be sessions with industry professionals so we can probably squeeze some learning from those.
A month later, we’d seen or heard from the founders of the top-billed startup exactly zero times and there had been exactly zero sessions for learning. I found it strange so I asked for a meeting with one of them and they reluctantly gave me his email address. He pawned me off on his assistant and, after one e-mail, it was fairly clear he had no intention of being a mentor. I actually started to wonder if he knew his name was on it at all. By the end of the 4 months, their total time invested was 45 minutes with the accelerator. It was very strange given the outline for the program included a very specific syllabus with promises of luminary speakers, tech for non-tech founders, and more. None of it happened.
At this point it felt like a house of cards. The program didn’t even feel like a community because in a co-working space, you hardly saw the other teams. We were further along than other teams so we start booking the meeting rooms and inviting everyone to sit and work together for a few hours whenever possible. I also started a yammer group so we could pool resources and communicate on the fly. Things start to get better for my team as we’re introduced to [name of a mentor] as a mentor and we finally feel like we’re getting some guidance. The Managing Director also made two hires so there was some hope that some of the promises might be delivered upon. The MD kept telling us how amazing [this mentor] was until it was announced that he is going to be the MD for [a competing program]. After that announcement I got another gchat at 3am in which she trashed him. I was told he was a hack and had never done anything worth mentioning in [the industry]. I ignored it, starting to see that the forest had some pretty crazy trees.
We were still committed to making the best of a bad situation when I got a gchat from the MD at 3am while working from home. She seemed irate (if not completely irrational) and started accusing me of “not participating” and verbatim stated that I needed to decide if we were a [previous accelerator] company or a company in her accelerator. She threatened to kick me out if I didn’t consult with her on every piece of my company’s strategy. I told her I was happy to listen and take feedback but I completely disagreed with her accusations and ultimatum, mostly because there had been nothing to participate in outside of what I’d done to try to help. I also told her it’s hard to trust her opinions because we’d seen nothing but back-tracking, fluff, and empty promises. Example: She walked into the room and announced that [some famous mentor] was coming in to speak to the teams. One of her team members read the email in full and pulls her aside to tell her that the email actually said he’s open for paid speaking engagements and anyone can get him if they have the budget for it. She never mentioned it again.
A few days later, I found out that my roommate (another founder) was getting the same kind of irate messages at the same crazy hours that I was. He was totally new to the world of startups but he knew something was off so he didn’t comply with her demands. She kicked him out and told him that her board wanted to kick him out for a while and she kept getting negative feedback about him from mentors. This went back and forth a few times with him being kicked out and getting back in. She even sent me messages about him, pulling me into the nonsense. I gave my honest opinion which was that accelerators are the place for companies to make mistakes. It’s supposed to be a safe place to learn. Kicking someone out for being true to the process is a violation of the highest order. The next day he told me that she’d let him back in.
The fourth or fifth time he was kicked out, I was out of the country and she sent me a message pulling me back in to the drama. She’d moved the date of the demo day almost a full month back from what we were told it was at the start of the program. He and I were on the same lease so I knew that what it cost to live there and that we’d planned our lease around demo day with 2 weeks to take meetings afterward. Neither of us had gotten enough value out of the program to get to a place where it made sense for us to pay another $[redacted]K to stay another 3 months which was the minimum most buildings will take, not to mention it would have to be prepaid.
She goes on to say that anyone who won’t be here for demo day is kicked out and tells us that she still has final say over who is considered a graduate of her program and who isn’t. I told her I was not going to extend the lease and she offered to “get my team in for demo day”. I tell her I’m not comfortable being treated differently because my team is further along. Then we had members from her team telling us they hadn’t seen her in a few days and they were worried about her mental health and physical well-being. Sunday night, the night before my roommate had meetings planned, she emailed him to says she’s cancelled his meetings until he takes a phone call with her. He refused and was furious that she’d have the audacity to cancel meetings that didn’t involve her in any way.
She blows up at him via text message hurling personal insults, calling him a quitter saying things like “This is why your cofounder quit” and “you’re in my program, I’m not in yours”. The fact is she promised his cofounder, who was at the time of application a full-time [name of a profession], that she’d help them raise at least $100K easily and she knew that was the amount needed for his cofounder to quit her [same profession] job. Everyone also knew the date that she had to accept or decline her contract for that year. The date passed and they’d raised $0. He called her delusional and wished her the best with her “program.” Trying to get out ahead of the situation, she publishes “all” of the messages between she and I and emails them to the team. She denied that she’d kicked him out despite there being a ton of proof in her messages to us. I’m a lot of things, but a liar isn’t one of them and I didn’t take kindly to her suggesting that I was. I search the document for a mentions of [the mentor mentioned earlier] and other incidents, knowing there is no way she’d include the vile things she said in a public forum. I searched and it didn’t come up. I searched my logs and pulled up, in real-time 3 dates that were removed from her log. I offered to go on but she made up an excuse for why she lied and changed the logs and quickly changed the subject. Her team remained oddly silent.
Days go by and her team starts to think all this needs to be cleared up so she schedules a meeting with her team, my roommate and myself. We got there, she proceeds to tell us that we’ve been a detrimental echo chamber and we keep twisting her words and drawing the wrong conclusion. Her team remained even more oddly silent as she accused me of getting involved in a situation that is “frankly none of my business”. I pull up the messages she sent me about my roommate and outline how it’s always been her pulling me into these situations. Her team looks horrified. She seemed to think that if she could “turn us against each other” that she’d get what she wanted. She asked what it would take for me to get back on board with the program. I told her and she refused. I told her officially that my team would no longer be involved with her program and wished her the best.
By the time we got home, we found out that immediately after that meeting, the two people she hired had quit. They were fine with not being paid for months at a time, they were fine with trying to make the best out of the situation. They were not fine with what went on in that room. Later, they’d admit to us that her goal was to attack the friendship because she thought she could get her way if my roommate and I were no longer on the same page. They also told us that there was no board of directors or advisers at the time she was citing them and that she’d never gotten negative feedback about my roommate. He reached out to a few mentors and found that they were shocked that their names were used to support such terrible behavior. At this point we decided that some of this behavior was pathological and it didn’t make sense to try to salvage anything. We finished our lease and left. There were 10 investors at their demo day and when they asked about us, she told them that we were out of the country working on a deal, representing that we were still involved with the accelerator.
The weird thing is that the MD keeps making intros, speaking highly of us and sending people our way. We think she does it because she doesn’t want us talking about our experiences. We don’t want to make a big public scene about any of this but we’d love to help design some sort of framework to help people avoid making the same mistakes we did in believing someone who is a bad actor in and on the ecosystem. On the outside it looks like she’s got it together but the reality is as documented above. I’d also love advice on how to handle talking about the experience when people ask about it specifically.
My reply was as follows:
ho. ly. shit.
how can i help? i don’t’ want to do anything negative, but stories like this are important to tell.
i could put it on my blog with out your name and redact any identifying information, and use it as an example of “please do your diligence” per the article. we’d remove names, geography, company purpose/focus, etc.
any other ideas?