Written Dec 22, 2022. (This is a draft.)
I've had two experiences with sociopathic manipulators.
It usually goes down like this:
- They "discover" you. They praise you, make you feel great at a point where you crave opportunity.
- They do a few nice things for you (intros to other people, give you 'advice', invite you to nice restaurants, etc..) and make you feel 'the life'.
- They start using you while making you feel like you owe them.
- They pull shady stuff, usually money-related: putting you in a bad business deal, straight out stealing money, etc.
- When you call them out or ask questions, they'll instantly dismiss or attack: say that you owe them, wouldn't be where you are w/o them. They'll tell you they know better and you're the one doing something wrong. They'll make you feel dumb about raising questions.
I think being young and ambitious, craving opportunity and exposure, makes you particularly vulnerable.
In a recent YC video, Dalton talked about "Fake Advisors" which resonated with this.
[Dalton]: a lot of the folks who are most approachable when you're a first timer [...] or you're trying to break into the industry [...] are often the most exploitative and [...] whose business model is just squeeze you [...] and you feel like they're doing you a favor while doing it [...] there's folks who really aggressively sell themselves to newcomers and part of the pitch is "oh I'm really important I know all these important people I can open doors for you [...] here's some other people that I know I can introduce you to" [...] and sadly the story [...] is you learn the hard way that those are people you want to not talk to. [...] A lot of the people were like medium famous and had some social media clout, they did enough to seem successful or drive fancy cars or seem rich that you would think they did actually know people.
(I've stripped the stories of details which would make them 5x longer and omitted the names. But I think the important lessons are here.)
5 years ago. I was 18, still in college. Building a few side-projects. One day, after a ProductHunt launch, a guy (let's call him H) contacts me telling he loves what I do and wants to hire me for his startup in NYC.
We talk for a bit. At first I wasn't really convinced by what they were building. But H was a super optimistic guy, selling just by talking. After a while, he convinces me that this is really worth it, he cites famous investors he's working with, tells me of his previous startup which was pending acquisition for a couple Ms, etc.
At some point he tells me it's now or never. I say fuck it and go, and leave for Manhattan instead of starting my college semester.
H showed me their office on 5th Ave straight when I arrived, at 2am
Things are bit crazy. H shows me the good NYC life. With him and 2 other guys we get an apartment 2 blocks from Times Square. We work a lot, party,... It was a dream come true for me. Felt like I made it.
H takes me and 2 other guys and say he wants to build a side venture, an investment strategy. We follow him. I work on the tech.
A while after, H starts convincing investors to send money directly to him so he'll invest it. He doesn't tell us exactly what is going on but things start to look a little bit sketchy.
Long story short, he (mysteriously) loses most of the money ($150k+). People that sent him money start to be suspicious.
Then he got fired from his own startup.
At this point, we (I and another guy who came on the project from UK) start questioning the situation. H tells us everything is alright, it regards only him and we shouldn't worry about a thing. We should continue working on that thing, outside of the startup and we'll form our own company with all equal shares.
He tells us the investors don't understand how these things work and they're stressing for nothing.
Because we both wouldn't be here without him and didn't want to leave the US like that, we're like: "alright, you know better, deal with your shit so we can continue working on cool stuff".
Then he makes us understand that he couldn't access any money right now to continue working on this thing. But if we can just find a way to stay afloat a couple weeks, he has some cash coming in that would fix it all (from his prev startup being sold).
That's how he got us into doing super sketchy stuff (tldr: mine crypto on cloud providers) to try and cover for the time.
It was soon clear that wouldn't cut it. Also that money supposed to be coming in? Turns out it wasn't about to land. He had been fired from that previous startup and they were disputing his shares for negligence or something.
When the investors who lost their money started pressing, lawers and legal threats started to get involved, the UK friend and me finally got the fuck out back to Europe.
A few years later, I get a text from a federal agent.
When I called the federal agent I learnt he was arrested on counts related to fraud.
This one hurt me more because of how fast it went from: you're my friend to oh, you're downright fucked-up. Let's call him X.
I knew X since a couple of years. He had a startup studio. One day in Paris, after lunch he invites me at his office so I could have a place to work.
There, I met a guy (he'll be Y) working on a project cofounded by the studio for 3+ months but who didn't have much to show for it.
In the past few weeks, as a side 'agency' venture he had closed a bunch of customers. I found this impressive.
We went to eat, hit it off and decided to give it a go doing that together. I would handle the tech. We shook hands for an equal % of share. (33/33/33 him, me, the studio).
After a few weeks, it became obvious that we didn't want to build an agency anymore and decided to pivot to building an (unrelated) product. We brought on two more friends to help.
When we called X to redistribute shares (20% each), he went ballistic, insulting everyone and telling us all to fuck off.
First we were like "wtf dude ?! just wanted to talk, never tried to remove you" but then it got to "ok there might be something wrong about this guy".
Then he sent audio messages. It was scary because he was super calm yet saying very hurtful things like:
- we comploted to get them off the cap-table, we are manipulating Y to quit him.
- without him we would go nowhere and end up "tearing each other apart"
- we're shit wannabe's entrepreneurs and won't go anywhere
- all the good things that happened to us where because of him. we are little shits who can't see the value in what he gave us
- we don't know anything about how startup studios work and their deal was great
Here is the really shady stuff that became very clear:
- when Y started closing deals a while back, X told him to use the studio's bank account to receive the money.
His excuse was "it's easier while we incorporate the company". So X got full control of Y's money. About 80.000 €.
When shit hit the fan, X just disabled the cards/access he had given us.
(Today Y started legal action for this.)
- X was to incorporate our company since the beginning but kept delaying.
He used excuses like, 'haven't had the time this week', 'yes our lawyer is prepping the docs', blabla). We ended up just doing it ourself but a lot of the $ was still in his account.
- Starting from when I joined, X's startup studio accompaniment could be resumed to: access to their office, a weekly call with out-of-context ideas and some intros (which led to 2 of our worst customers btw).
No $ investment, no execution help. In exchange for 30% shares.
Compare that to any other incubator/studio. At the time we didn't even think about it as we trusted him.
- A couple days after he told us all to fuck off, X contacted Y telling him he would "forgive him" for his treason if he abandonned us and came back to him.
Like wtf?? crazy abusive girlfriend type of shit.
- Before that, there were little warning signs with the way he treated people:
Diminishing what they did, calling them by wrong names after meeting them 5 times, looking at his phone while we were talking with him, etc.
In retrospect and talking with other entrepreneurs, all predatory behaviour with many warning signs. I honestly felt sad as I had though X was a friend prior to that.
Y, the other guys and I continued working together for a couple months after that (until we went our own ways as we wanted to do different things).
How to protect yourself
At the end I don't really regret those experiences.
Despite the bad stuff, I can still see the good those people did to me. One doesn't necessarly cancel the other. I met great people through them who I'm still friends with.
I always 'escaped' before real damage could be done. I didn't get very hurt apart for a bruised ego. And now I feel like my bullshit-detector is better adjusted.
Some advice I keep for myself:
- Never get in a position where another person owns you.
- If it's too good to be true, it probably is.
- Only work with people who show high integrity with their action.
- Look out for warning signs:
- how they talk about/treat other people. how other people talk about them.
- lack of emotions in weird situations
- When you try discussing a sensitive issue and they just dismiss it implying they know better and you should let them handle it → run.
- When presented with a deal, even if you trust the person, ask experienced people if it looks fair. It's okay to not give an answer directly (and to negotiate).