What's the Opposite of a Unicorn? Tales From a Nightmare Startup
We hear a lot about the Ubers, the Airbnbs, and the Snapchats, privately-held tech startups valued at over $1 billion known in the industry as "unicorns." But not every startup ends well. And one story that surfaced recently tells the tale of a startup going down in flames.
A marketing professional relocated from Dallas, Texas to Silicon Valley to chase a startup dream. But from her account of a month on the job, she lived closer to a startup nightmare.
Paying Her Dues
In a story posted to Startup Grind, Penny Kim didn't name the startup or use real names for executives and other employees, but she did list a plethora of shady business tactics and labor law violations. For example, Kim noted that her first paycheck was late, and at one point 15 employees hadn't been paid for a month. But things would get worse: the startup was already a month behind on paying staff when it sent phony wire transfer receipts to employees and told them to take it up with their banks if the money didn't appear.
Eventually, Kim filed a wage claim with the California Division of Labor Standards and Enforcement, as did several other staffers. But when the founders discovered the filing, she was fired. And while she says she finally was paid all the back wages she was owed, she never received her signing bonus or severance the company promised. "At this point," Kim wrote, "nothing about that startup surprises me anymore and it all seems like a horrible nightmare I was lucky enough to wake up from. I still have the wage claim and retaliation complaint on file with California and will be following up with them."
Naming Names
Though Kim tried to keep the major players anonymous, Business Insider did some digging and spoke with the startup's former CTO, Al Brown. Brown, who admitted not doing a background check on the company's founder, ID'd as Isaac Choi, left the startup last week and claims Choi was the main bad actor. "I'm out $230,000 plus expenses from April and back pay," he said. "I got pretty hurt here." Also out money were two employees who trusted Choi so much they invested $50,000 and $15,000 respectively.
Kim notes that her former employer is on their third new name in four months. Those names? According to Business Insider, 1for.one, JobSonic, and, most recently, WrkRiot.
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Related Resources:
- I Got Scammed By A Silicon Valley Startup (Startup Grind)
- Top 5 Lessons From Small Business Lawsuits (FindLaw's Free Enterprise)
- Startups Need to Hire Lawyers, Too (FindLaw's Free Enterprise)
- Crimes and Scams (FindLaw's Free Enterprise)
