They've graduated 5,000+ companies, so some fraud is hard to avoid, especially with young hungry founders willing to do anything to succeed. Honestly, it's a pretty good track record that there's only been a handful of companies like this.

It's precisely because they graduated 5000+ companies that fraud is more difficult to avoid.

They scaled up massively the size of each batch and their frequency to a point where they are incapable of auditing them.

Maybe someone should start an auditing company for YC... oh

There is too much friction in the audit process… someone needs to solve this

this is a teachable moment for yc, maybe the cost of investing in a sour apple is a lot more than half a mil, maybe there's a brand or reputational cost, even in places you least expect it right, these two seemingly had everything laid out for them by investors, did they even come up with compliance? who told them to work on that? now look what happened, it's like everyone cant get far enough fast enough now. What about their lead investor insight partners? what's that conversation like?

it's all just very strange and stupid, ironically from the the startup posing as auditors..

Seems crazy that anyone (startups and buyers) would trust these guys for audit.

Shows the “compliance theatre” of what SOC2 has become

It's always been one.

Every single technical auditor I've dealt with has been majorly incompetent and wanted to do things that would decrease security. And these were not some cheap bottom of the barrel companies but the big "industry leaders".

Never forget https://serverfault.com/questions/293217/our-security-audito...

Oh my, that is so funny and terrifying, but also exactly what my first expectation is for a consultancy firm

It can work under the umbrella of some sort of coordinator

That looks like what happened here.