▲ 510 points
back
314 comments
I'm getting the impression that a lot of people in this thread think this is because they violated an open-source license and saying things to the effect of, "they're just the ones who got caught". I also thought that was the scandal initially. (And when it comes to license violations, yes, there's absolutely more where that came from.)
But that's just the cherry on top. I don't think they're being thrown out because they violated a license. There are really serious fraud allegations. Allegedly they were rubber-stamping noncompliant customers, leaving them exposed to potential criminal liability under regulations like HIPPA.
https://deepdelver.substack.com/p/delve-fake-compliance-as-a...
I've only skimmed this so I do not endorse these allegations, but I think it's context missing from this discussion.
There's quite a good summary of the allegations here https://www.reddit.com/r/startups/comments/1rz15ui/i_will_no...
>Pre-written audit conclusions. The "Independent Service Auditor's Report" and all test conclusions were already filled in before clients had even submitted their company descriptions...
>Copy-paste templates. 493 out of 494 leaked SOC 2 reports (99.8%) had identical text, same grammatical errors, same nonsensical descriptions...
There's an excellent podcast and writeup on this from Patrick mcKenzie, which explains the story in more detail, including an interpretation of their statement and background on why this is a scandal in the first place.
https://www.complexsystemspodcast.com/episodes/delve-into-co...
I came across a top tier compliance auditor doing the same thing recently. I tried to talk to them about it and rather than approaching this from a constructive point of view they wanted to know the name of the company that got certified so they could decertify them and essentially asked me to break my NDA. That wasn't going to happen, I wanted to have a far more structural conversation about this and how they probably ended up missing some major items (such as: having non-technical auditors). They weren't interested. They were not at all interested in improving their processes, they were only interested in protecting their reputation.
I'm seriously disgusted about this because this was one of the very few auditors that we held in pretty high esteem.
Pay-to-play is all too common, and I think that there is a baked in conflict of interest in the whole model.
> But that's just the cherry on top.
That's not the right metaphor here.
lol strongly agree it is just cherry on top. In big tech they also copy but just copy in a smart way so I don't believe that's the reason they got removed.
YC has no problem with morally questionable behavior, many YC startups do things that are just as shady. YC is, ultimately, not responsible for what these startups choose to do. Delve’s problem is that they betrayed so many other YC companies in the process. An important value of being in YC is access to a ready-made customer base. The licensing issue is nothing compared to their fake audits but it is an affront to the YC community, hence, kicked from the community.
I’m sure if Delve has only engaged in fraudulent audits or had only resold another YC company’s product, they would have been allowed to stay, the problem is all of that combined pissed off enough other YC companies.
All LLMs do this, yet nobody bats an eye.
hipaa*
Someone leaked an internal Bookface chat from Garry Tan (YC CEO) saying:
We have asked Delve to leave YC.
YC is a community, not just an accelerator. The founders in our community have to trust each other, and we have to trust them. When that trust breaks down, there's really only one thing to do.
We're not going to get into the details publicly. We wish them well.
I have no direct knowledge of the accuracy of any of this. This is not my account.
Sure, most companies could add an About section and probably put this behind them pretty quickly. They could have even hired someone like Delve to assure this kind of thing wouldn’t happen again.
But Delve themselves can’t really do any of that. They’ve screwed up on a fundamental piece of their own business model. Their core offering *is* Compliance as a Service!
How could I trust their word that they’ll ensure my company is compliant? How could I trust their word that a company I’m doing business with is compliant? They can’t even handle their own Apache 2.0 licensed works, and that’s child’s play- relatively speaking. I’m supposed to trust that they can handle PCI and HIPPA and all the rest for other companies?
This is like having a dentist who doesn’t brush and floss their own teeth. Or a building inspector working out of a moldy office suite with exposed rebar. Or an editor with a personal website full of typos and grammatical errors. It’s a dealbreaker to anyone with common sense.
It's not just about delve. It's about yc's model. YC encourages YC companies to trust other YC companies even though they are early.
If you can't trust your batch mates for something as crucial as compliance, the model doesn't work.
Related: Delve allegedly forked an open-source tool and sold it as its own (295 points, yesterday, 153 comments) https://news.ycombinator.com/item?id=47615434
This other profile is still up:
https://www.forbes.com/profile/delve/
30U30 never ceases to amaze.
Great to see them take action.
I'm waiting for cambioml next. A married couple notorious for fraud that apparently relocated to ME as a result. That's outside of the terrible treatment of ripping off interviewees (see: https://www.reddit.com/r/devops/comments/1n7cdua/got_a_devop...). Won't even comment on other stories I've heard related to them screwing over employees/cofounders.
On the one hand the company that was selling companies pre-made “You’re hipaa compliant” pdfs was doing fraud, but on the other hand the companies that were buying “We’re hipaa compliant” pdfs that said they had implemented compliance measures that they definitely hadn’t were also doing fr
Curious - in this situation, does delve return money to YC? Or YC simply writes off the investment
Here is Delve’s defence to the whistleblower
Bye-bye tweet from founder: https://x.com/kocalars/status/2040262537166618887
Notably YC hasn't wished them a farewell.
Turns out you can't "fake it til you make it" with SOC2 compliance.
Related from an hour earlier: Delve removed from YC website [archive.org] https://news.ycombinator.com/item?id=47634405
But they "set the record straight"? Right? It was just a malicious actor who stole data from their system!
Good riddance to bad rubbish.
https://delve.co/blog/delve-sets-the-record-straight-on-anon...
Not surprising that Cluely is using them.. they were probably like, what we're compliant, sure if you say so
Interestingly, they show up in the company list. When you click the link it returns 404.
Its quite ironical and interesting at the same time, seems like there is a threshold size/impact beyond which everyone would come and save you, anything less and you will have to bear the consequences.
Classic. I knew this would happen ever sine i first saw Delve on YC. I was right to trust my gut, and never used their product.
Sadly looks like another example of “fake it till you make it” in highly regulated industries is playing with fire.
The headline here says "Delve removed from Y Combinator", but the link doesn't go to a statement by Y Combinator. It goes to a 404.
Is there reason to believe that Delve has been removed from Y Combinator, the organization, or is this more an announcement that Delve has been removed from Y Combinator's website?
I like that this sets the precedent that if you want people on HN to believe that they’ve dropped any arbitrary company you just have to point to a convincing-looking url on the ycombinator domain and the 404 signals that you are both correct and following the rules.
From @patio11 a week ago:
https://www.complexsystemspodcast.com/episodes/delve-into-co...
YC needs to go back to how it was. Choosing those who know what they are doing, and have been in the game for long and not blindly choose those who have graduated from tier-1 institutions. University degrees mean nothing at the end of the day.
And please stop investing in slop/wrappers. They do not solve World's problems.
I feel there has been complacency set into investing in general where investors are chasing quick money (first crypto and now AI slop) over solving hard/grueling problems that take a long time to fix but have huge returns down the line.
And we have a lot of tough problems that still need solving. AI won't magically fix that, despite being a great tool.
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.
We need a page to whistleblower dishonest startups. I know a startup where one of the cofounders is literally illegally working for it. We have people working in cafes getting into trouble but not start up cofounders raising tons of money. Seems so unfair.I am pretty sure the female in the husband-wife pair does not have authorization to work.
Duplicate of https://news.ycombinator.com/item?id=47634405
Interesting! I worked for one YC startup that committed blatant fraud, with the founders vanishing when investors started chasing them to bring them to responsibility. And they haven't been removed. Just marked as "inactive".
Can they keep their CISO out of jail?
waiting on the cluely scandal next
404s for me
> 404 not found
"delve removed from y combinator" removed from y combinator
There is no saving Delve after this.
The only next product launch is an investigation.
hmm, how is this not like when Sam Altman was kicked out?
Post now seems deleted.....
Well, can see why...if its fraud you only post it when results of investigation by 3rd party is in due to defame concerns...
An I the only one who has 404 not found when I click the link
The only good delve is the go debugger
can't believe I almost spent 10 grand on this company a week before they blew up.
streissand effect in action, surprised this thread was allowed to live.
"By combining the evidence I collected together with what the sim.ai team provided, I will show that Delve has stolen an open-source company’s tech by violating their license and then making a lot of money with it."
->
You mean like OpenAI, Anthropic and all these other 'unicorns'?
I'm happy we're all clear on how bad Delve is but in essence what they were doing is exactly the same as what these AI companies do.
Having gone through the SOC2 process multiple times and having worked with and read SOC2 reports from many public companies, it's difficult for me to understand the outrage.
The specific fraud allegations are bad (lying about US based auditors) but it's completely normal and common for soc2 reports to be templates with no company specific information. It would be unusual for reports to include anything about the specific information found during an observation window as some have suggested.
SOC2 is basically fake and it isn't possible in practice to fail to be compliant. You really can apply the same template to all companies and automate the audit process.