Community is not a buzzword, it's a challenge

Welcome to Startups Weekly, a fresh, human take on this week's startup news and trends. To get this delivered to your inbox, sign up here.

I first covered Launch House in October 2020, when the co-founders described a strong focus on inclusivity when building hacker houses. A co-founder then said, "I wouldn't say we're the next Y Combinator, but the next YC would look something like this." The company quickly raised venture capital funding for its vision of what a next-gen entrepreneurial ecosystem looks like, combining the benefits of remote working with the growing awareness around "community". He has earned investment dollars from Andreessen Horowitz, Lightship, CAA co-founder Michael Ovitz, Chris Ovitz of Electric Ant, Mike Dudas of 6th Man Ventures and other angels.

Now, a Vox investigation last week highlighted specific allegations of harassment, sexual assault and abuse of power at Launch House. The answer was complex. The irony of the "build in public" mindset is that when allegations and scrutiny surface, confidentiality - or at least opacity - is back in vogue.

As TechCrunch reports, some existing investors in the startup and its venture capital fund have issued public statements supporting the alleged victims and denouncing the alleged behavior described by Vox in its Launch House article. Launch House, meanwhile, confirmed to TechCrunch through a spokesperson that it is launching an independent, third-party investigation through a retained law firm.

A few days after the survey went live, Launch House held a town hall with members of its community. Co-founder Michael Houck said the startup "dropped the ball by responding to this fairly quickly [and] with enough compassion…it doesn't reflect the values ​​that we've built this community on since day one and that are close to our hearts. ."

“In other words, we should have met you all earlier than today,” Houck added: “What I can say now is that we are ready to talk and we have a map." The conversation focused on three topics: what Launch House says it has done in the past, what it will do in the future, and how it plans to rebuild trust with the female founders of their cohorts.

The Vox investigation, Launch House's response both publicly and privately, and the community's outrage or silence at the allegations that have surfaced remind us that community is not a word fashionable. It's a challenge. Some people may view LH as a caricature of the 'VC-backed community startups' trend, but it offers a real insight into what happens when these 'buzzing trends' meet a bull market, in a distant world, with limited controls. and sales.

For the full story of key private town hall details, read my story: "Launch House is holding private town hall, says investigation underway." For investor and community reaction, read my story with Rebecca Szkutak, "Launch House Community Responds to Allegations of Misconduct and Harassment."

In the rest of this newsletter, we talk about Y Combinator's paranoia, fund manager changes, and a follow-up on one of the pandemic startups admitting it's wrong. Be sure to read the whole thing as I slipped a TC+ discount code, especially for Startups Weekly readers, into the post.

If you like this newsletter, do me a favor? Forward it to a friend, share it on Twitter, and tag me to thank you for reading!

Michael Seibel of Y Combinator, managing partner and head of the accelerator, is one of the most influential people in startups. He joined Equity to discuss the value of demo day, diversity challenges and competition.

Here's why it's important: Since YC doesn't do much press anymore, the interview clarified some misconceptions. More on TechCrunch+ tomorrow, but in the meantime, here's how he described the usefulness of demo days.

It's hard for me to generalize about demo days. There are a lot of different demo days around the world, and I'm not sure how they work.

I would say that the YC Demo Day has two functions. The first is the most obvious, which is: showcasing businesses and generating leads. The second is a force function...