Fundable comes to an ugly end

[reidman]

Pretty one-sided, but I suppose a domain name can only belong to one side of any argument.

For the uninitiated, Fundable was a site where you could input a dollar amount and accept donations towards that 'goal'. If the goal wasn't reached within a certain time period, the money was returned to the individual donors. If the goal was reached, the money was released to whoever initiated the campaign, minus a hefty 7% commission fee.

As far as I could tell (I used it back in 2007 but quickly jumped ship when I realized how rickety it was) it was pretty much a giant Paypal API with bad UX and even worse customer service.

[Confusion]

Do I understand correctly that https://tipit.to/ might be a (cheaper) alternative?

(Disclaimer: I am in no way affiliated to this site, apart from liking a Java project the owner works on)

[megaduck]

As my cofounder and I are currently finalizing our own incorporation, I look at Fundable's sad situation and think, "Wow. What if that were us? Is there any way we can avoid ever having that kind of situation with a clever bit of legalese?"

Unfortunately, I suspect the answer is "no". As soon as you give one partner the ability to eject the other (for whatever reason), you open the door for all sorts of abuse. Besides which, if a partner wants to cause chaos and destruction, you're in for supreme nastiness, regardless of the legal situation.

So, at the end of the day, I think the best you can do is choose your business partners carefully, keep things above board, and do the best you can to behave morally and ethically. That way, even if things go to shit, hopefully you'll still be able to walk out with your head held high.

I'm sorry Fundable went out this way. Sounds ugly as hell.

[wmf]

http://en.wikipedia.org/wiki/Shotgun_clause

[ars]

I think you have two ways of dealing with it:

51/49 split, or have 3 partners.

Both methods ensure you never end up with a stalemate.

[IsaacSchlueter]

I agree. Seeing stuff like this is scary. My heart goes out to both parties, as I'm sure it's not pleasant for either of them. Even if the story is 100% accurate, and Helm is just a bad guy, no one who's that rotten is happy. It's a shame.

Money has a funny way of ruining even the best of friendships.

Be careful. Do the right thing. Cover your bases to protect against either of you going crazy.

[imajes]

Yeah, it's why you find a good third party mediator and ask them to be a non-exec or mediator/advisor. It also helps to have the arguments and tantrums early- at least you'll know if you can get over them or not before it's too late :)

[vaksel]

   Louis Helm programmed the the payment system.

if this is an indication of their attention to detail, it's probably a good thing they had to close before they lost their user data to some hackers.

Based on what was written, I'd be surprised if both "founders" aren't 18.

edit: googled, and found some photos(Pratt looks to be ~26, while the coder guy does indeed appear to be ~16: http://emilychang.com/e/go/ehub/interview/fundable

[mseebach]

> found some photos

You could also skim the article on the page with the photos and look for any biographical information...

The Fundable team is made up of Louis Helm and John Pratt.

Louis, Fundable’s software architect, studied Computer Science Engineering at the University of Michigan. He is co-author of the Seventeen or Bust distributed computing project (seventeenorbust.com), which recently discovered the largest known non-mersenne prime number with the help of 5000+ users. He worked as a software engineer at Jabil Circuits before leaving to work on Fundable full-time.

John graduated in Political Science at the University of Michigan last December, where he worked for the university’s paper as a photographer. He also studied at the University of Havana, Cuba in 2003. John programs, designs and writes documentation for Fundable’s pages.

[mquander]

> After John Pratt contacted Louis Helm's father, Louis Helm called John Pratt and agreed that his actions were immature.

16 sounds more likely.

[tlrobinson]

The first two times I read this comment I didn't notice the the extra "the".

[eplanit]

I'm torn between 'sad' and 'pathetic'. The word 'immaturity' applies, without question or hesitation.

[pvg]

No need to be torn, it's both (and more). Obviously, it's sad when your venture fails; writing a long rambling missive (in the third person) about how you called your partner's parents and how everyone should sue your partner, though, is pathetic. Could have simply said the company is shutting down, that one of the founders is no longer able to work on it and provided a contact address for people who need to recover their money.

[ivankirigin]

  seek legal action against Louis Helm personally 
  should he fail to resolve your payment issues promptly

Well, IANAL, but I don't think that is how it works. The corporation is liable for funds it holds on your behalf. Boy would I be worried if I were Pratt.

[chrismetcalf]

For those who are late to the party like me, here's a screenshot I found of the original farewell message: http://img18.yfrog.com/img18/2396/s8u.png

John was actually one of my college roommates, it's sad to see this come to an end like this.

[falsestprophet]

This is what happens when you give someone 50% of a company for simply having an idea.

[fhars]

From the perspective of the writer it reads more like "this is what happens when you give someone 50% of a company for simply writing the code." At least one side seems to have gotten something wrong...

[gwtwscrltt]

John Pratt and his company FUNDABLE NEVER SENT ME A CHECK for the $400.000 raised. It was raised JULY 27 2009 AND THIS IS OCTOBER 18 2009. He will not reply to any emails and the company has NEVER had a way to SPEAK to anyone EVER. I am sure i am just one of many people who have had their money stolen from FUNDABLE. I would like to start a class action suit and am looking into creating a website so that we (ripped off people) can all find each other. He is a common THIEF. This is not a story of basement company gone awry. This is a story of outright plundering of peoples wallets and then walking away and thinking there is no consequence. WHERE IS THE 400.00 ALL THIS TIME? Anyones guess but it (minus their huge 10percent cut) is NOT in my hands nor supporting the rescue dog SY that it was intended for. DO NOT USE FUNDABLE EVER.

[wheels]

I have to really ask, "Why is this upvoted so much?" There aren't really lessons in here; it's just bitter drama.

[vaksel]

people love a train wreck, + it has the lesson of being careful of who to pick for your cofounder, and about giving second chances to people who screw you over.

[brianobush]

Lesson: in the articles of incorporations, spell out the arbitration process and include clauses that prevent out of control behavior - like automatic forfeiture of company stock.

[maxied]

This saddens me as well, as I was hoping this independent financing model would succeed.

But I definitely see a few lessons here: 1. The need to have performance/milestone based equity sharing vs blindly giving a person 50% based on their POTENTIAL. 2. The need to have a checks and balance system that places control of the domain/trademarks in hands other than the programmer or developers. That way the person controlling the domain can have some control, while the developer has other control (passwords, access). And a third party/person who may control the finances. (Domain/Trademarks/Copyrights)+technology+finances. Like the checks and balances of Legislative+Executive+Judicial systems. 3. The need to repair or remove faulty systems/people at the first signs of unreliability.

[wehriam]

There are lessons here! But no matter what your conclusion, I'd rather crash and burn than fade away. Cheers to Fundable and to making a stir.

[patio11]

I am having a total mental block trying to recall the name of the "Donate people money through Twitter" service that was on HN a few times, but I think this is what he meant when he said "Do not take payments lightly."

[Edited to add: Tipjoy. I knew it was T-something but I ran through about 15 combinations of Twit-X before realizing that it was not from that naming convention.]

[piramida]

Could not resist a laugh really, this is so childish. That's why I would not put any trust in an online business without knowing it's background - can as well be two boys in a basement.

[DanHulton]

Wow, that's not good for anybody. I guess this is really a case of "be careful who your partners are", jeeze.

[citizenparker]

Long live http://www.kickstarter.com

[jrockway]

This is exactly why I will never go into business with a non-technical person. This site is exactly what I think of when I think "business person".

[maukdaddy]

That's a piss-poor attitude.

[edw519]

In spite of all the issues this case raises, only one popped out at me...

Team of 2: 1 programmer + 1 non-programmer = bad combination.

Maybe I'm a little old fashioned, but in a 2 person web startup, both should be programmers. I'm certainly not suggesting that this is what caused this situation, but it sure didn't help...

Since only one programmed, the probability of future difficulties increased dramatically, and once they did occur, he was the only one who could have dealt with them. A team approach probably would have been much better for technical problems, both preventing them and handling them.

[mikeryan]

This depends entirely on the business you are trying to build. Trying to generalize this into 2 people == 2 programmers == success isn't going to work in a vast majority of situations. Who's going to do business development if you have corporate clients? Who's going to do visual design?(programmers? Yikes!) Who's going to deal with investors and press?

This product didn't fail because there was only one programmer (heck I'm pretty sure digg started with obyrne and Kevin Rose). Fundable failed because it poorly managed itself.

[jacquesm]

Agreed, in general only one programmer is a mistake anyway. You need someone to keep you sharp and to bounce stuff of when you're stuck, or to work together on the tough bits to make sure they come out right (APIs and things like that).

[crucini]

I wouldn't endorse that.

A lot of successful partnerships had clear division of responsibility - often an "inside man" and an "outside man".

The inside man handles the employees, bookkeeping and systems. The outside man handles sales.

When two cooks are responsible for the same pot, there's trouble. And unwatched pots.

There are many variations on the good pattern - take McDonald's. Ray Kroc handled the franchisees and systems, while CEO Harry Sonneborn handled the money, real estata and investors.

[WesleyJohnson]

I'm curious if anyone has experience with something like this or know of other situations where a joint venture was owned 50/50 and one side allegedly decided to take their ball and go home?

Is there legal recourse either side can take to reclaim ownership and move on?

[hristov]

There may be legal recourse but the legal system moves so slowly that in Internet time you are pretty much screwed. So in the beginning stages it may be a good idea to keep copies of all software, data, etc. close just in case one gets locked out of the servers.

I know of this one company that decided to move their servers out of a collocation facility. The collocation facility hated to lose a good customer so they just locked the company out, disconnected the servers and did not let the company get to them. But they helpfully offered to reconnect the servers if only the company would sign another long term contract. The litigation took many years, so the data on the servers was pretty much lost for all practical purposes.

So yeah ... keep backups and keep them where you can get to them if the s hits the fan.

Regarding the domain name ... I suppose one person needs to have control of that, no way around that. Well, it is possible to set up a trust where an impartial party (such as an attorney or a professional trustee) controls the domain name according to a previous agreement between the founders, but if you have to resort to this, there is probably not enough trust to do a startup.

[pilif]

so he's complaining about his partner being immature and the second phrase on the site gives away said partners personal contact information?

Am I the only one seeing a slight bit of irony there?

[jjames]

Here is the boing boing post referenced in the original farewell message: http://boingboing.net/2009/08/22/fundable-rips-off-hu.html

Comments #5, #13, #23, #25, #30 and #31 between Mr. Pratt and Cory Doctorow are the relevant bits. I'm sure there is lesson here about mega-blog PR.

[dschobel]

Kind of frighteningly, it's now back up in it's original form, ready to take your money again.