Defendant Mode
September 2026
At a YC event last week, a founder gave a talk that everyone was still thinking about days later. I can't tell you who, or what the company does, because most of what she said is covered by a protective order. But the theme was that the conventional wisdom about how to run a company under investigation is mistaken.
The conventional wisdom goes like this: hire the best lawyers and do what they say. Go quiet. Stop shipping. Let the professionals handle it. She did that, and she said it nearly killed the company. Growth flatlined. The best people left. For eight months the most important decisions at her startup were being made by a man billing in six-minute increments who had never used the product.
So she stopped. She went back to running the company the way she had before. She calls it defendant mode.
What it is
As far as I can tell, defendant mode has not been written about, which makes sense, since the people who know the most about it have been advised not to write anything down. So I can only sketch it.
The central insight is that an investigation is not an interruption to the business. It's a condition of the business, like weather. Every company in our portfolio will be investigated eventually; it's close to a definition of what we fund. The ones that survive are the ones that treat it as a channel. Kindling added 9,000 policies the week the fourteenth state announced an inquiry. People hadn't heard of them before that. You cannot buy that kind of reach, although, to be clear, they did also try.
What it isn't
Defendant mode is not recklessness, and I worry some founders will use this essay as an excuse. There are things you must not do. You must not delete anything. You must not talk to witnesses. You must not, as one founder did, invite the investigators to Demo Day "to see the vision." 1
What it is, is a refusal to let the company's metabolism be set by the slowest process in the room. The legal system moves in years. A startup moves in weeks. If you merely keep moving at your normal speed, then by the time anyone has established what you did, you're a different company, in a different jurisdiction, with a different name, doing something else. At that point the case is a history paper.
I used to think the purpose of speed was to outrun competitors. I now think competitors were never the ones chasing us.
Notes
[1] They came. Two of them have since left government and I understand one is raising.
Thanks to [sealed], [sealed], and Captain Leopold Varga-Nwosu, who read a draft of this by satellite.
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