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  • Dima Syrotkin

My co-founder stole money from me. Here is what I learned.

Updated: Dec 25, 2020

A fable on why integrity matters and how to judge it



My co-founder borrowed money from me for the cancer operation of his mother. At that point, he was working remotely for a Finnish tech startup and was sure he could return the money back to me in a few months. After he stopped replying to my messages I checked in with the company for which he worked. It appeared that he interviewed with them but never got the job. I still don’t know if his mother ever had cancer.


First of all, let me clarify that I was the best man at this person’s wedding a couple of months before he borrowed the money. I knew him for 3 years at that point, worked very closely with him as the right-hand man in the startup for 1 year, we shared a fair bit of vulnerable conversations, and we even slept in the same bed twice during the strategic replanning company retreats in Serbia and Amsterdam due to the lack of beds. So I could claim that I knew him fairly well and considered a friend.


If you think that this is weird, read on, it only goes downhill from here.



I should have seen it coming


Our startup was running out of funding. If you are curious about the details, check the story that went viral on Medium on “how I spent €200.000 on a failed startup by raising money, hiring people, and building a product no one wanted”. My ex-cofounder used the money from the sold hardware we didn’t need anymore after closing the shop down to pay the employees we were firing although the agreement was to use it for other purposes. Although it seems like common practice to pay employees you are firing, his responsibility was to warn the people beforehand, set the expectations straight 2-3 months beforehand, and offer them to leave earlier considering our precarious situation. Apparently, as far as I understood, he wanted to shield them from the harsh truth and didn’t tell the whole story. Although it’s a “noble” thing to do to pay the people that were his tribe, we had other plans for those funds.





Also, in discussions, he would often bring up topics that would make me question my morality. The idea of contractual schemes which allow to legally dilute other shareholders down the road came up. “Is this OK to do this, even if this is legal?” - was my reaction to some of his ideas. Nevertheless, I trusted him and liked him, and there was no place for doubting my right-hand man. Luckily, we never executed any of his “dark magic type” ideas.


Looking back at these situations, this was a clear sign. If he thinks such thoughts, I should have figured that he will scam me as well, sooner or later.



I can understand him (maybe)


The family, his wife, child, and parents, was his main value in life. And he shared that he grew up in poverty and that shaped his worldview and the desire to never get back to that state again. It’s not even the money that was hugely important to him, it is escaping poverty. These factors made him think that he is justified to do anything if it serves the higher goal of serving his family, his tribe. He was ready to do anything for them, and I mean literally anything. In a weird way, I can understand why he didn’t adhere to our agreement when the startup was going down, and I can understand why he stole money from me. This is like rooting for the villain in a movie. And it teaches you that there are no villains in life, only people who lost their way.



It is hard to let go


It is still hard to forgive him and completely let go of what happened. I don’t think about it too often, but it feels like one of those stains that one might not be able to erase. Still, I believe I have already forgiven him to a big extent. And I hope to come to a point where the stain is completely dissolved from my subconscious. The reason for the necessity of forgiveness is simple: I don’t think there is any point to vilify the person and carry negative thoughts around, it would only harm myself. That is not to say that I would ever want to work with this person again, that would be just plain stupid.



Borrowing money is the cheapest way to test people’s integrity


When I shared about my struggle to let go with my mom, she told me something that seems like the wisest thing in the world.


“You were lucky that you got rid of him so cheaply!” - she said.


Damn, how right she was! Indeed, imagine if he would have robbed me a few years later, for a much bigger sum! And what is money anyway if not just paper (not even)? How great is the value of a relationship in comparison? He could have done so much more damage.


People like Warren Buffett say that in hires they look for smarts, energy, and integrity. They admit that integrity is the hardest to test. Here is what I learned from this experience: continue to borrow money to friends, it is the cheapest way to test their integrity! Trust by default, but don’t tolerate signs of the erosion of integrity.


Like these little nuggets of wisdom? Join GrowthClub where founders like me are sharing precious advice with you on a weekly basis. GrowthClub is a community of founders where founders exchange growth hacks and build genuine connections in 1-on-1 video calls.


Picture credit: Travis Essinger

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