While I do think Delve and the leadership there should be held responsible, it's a bit weird to see YC and others take shots at them for breaking the law when so many of their prized unicorns achieved what they did by being willing to just ignore laws and deal with the consequences later.
While I agree with you, I also find myself wondering who draws the line. Given the current political atmosphere and its increasingly fluid relationship with "truth," I have to consider that the line for others may not be where it is for me — especially given the nuance buried in the details of many B2B deals.
Their value prop had to be strong enough to get past YC, past the other founders in the batch, past due diligence. Given that, I'm no longer comfortable casting "fraud" as a clean binary.
To be clear — I do genuinely believe they are a fraudulent company that lied and deserved to be removed. But introspectively, I have to sit with the fact that the space between "working around dumb regulations" and "outright fraud" is murkier than we'd like to admit.
The vast majority of crimes are still being prosecuted as such. You have to reach a certain size/notoriety and money to buy a POTUS pardon; I doubt that matters for a relatively unknown outfit like Delve.
3. Customers want to do something, you help them do it, and nobody has done it before, so whether it's legal or not is kind of up in the air.
E.G. Uber exploited a legal loophole that distinguished the kind of taxi service you hail on the street from the kind of taxi service you call on a phone.
The latter were much less regulated, and usually much more exclusive and pandering to a richer crowd. Nobody really knew which kind Uber should be classified as, it was the first kind in practice (same customer base as normal taxis) but the second in theory (ordered, not hailed).
It is clearly different because in one case you are not guilty of fraud.
Being guilty of a crime plus fraud is obviously worse than just being guilty of the crime.
Breaking the law by stealing a loaf of bread is obviously different to killing one million people but "both boil down to breaking the law" - I'm not sure that comment contains that much information.
Let me more clearly instead say that many successful startups knowingly and intentionally broke the law.
But I agree that Delve is a special case and should naturally be held to a higher standard here because their whole business is around being compliant with the law. When most other startups break the law, they do it to get an advantage over competition. Delve did it in a way that sacrificed their core value towards customers.
The difference is that Airbnb customers used Airbnb because they thought hotel regulations were dumb and overbearing (or at least, they didn't care about the laws). Delve customers were literally trying to obey the law and Delve (allegedly) lied to them about it.
> Ignoring a law is different from knowingly and intentionally breaking the law
This is like a line from a Naked Gun movie. The only way that this sentence could be true linguistically is if the party doesn’t break the law that they’re ignoring (e.g. I could ignore the rule against perpetuities while drunk driving through a zoo)
There is a difference between "fake it till you make it" and "blatant widespread fraud", but the line is blurrier than many startups would like to admit.
I think it's fairly straight forward why. It's because Delve broke the law and got other YC companies in trouble vs other industries & people not under the YC banner.
Like, it's a company that sells AI-slop powered regulatory compliance. How many laws do you think the "fake it ill you make it and you'll never make it" AI will break? But "regulatory compliance" is laws that startups hate, so breaking them is good.
Copyright and the copyleft licenses built upon it are the laws that support the software industry instead of just making sure innocent people aren't hurt by all this innovating and disrupting.
