Comment by light_hue_1

The problem is that they took someone else's code, claimed they built it themselves, and then claimed that as evidence for the velocity and capability of their team.

If they had said it's based on X. Or that they're going in a different direction. Or even that they're going in the same direction but will best that other team. Who cares? YC should bet on multiple companies in the same space. It's only logical.

What bothers people is the lie.

Also. They did break the terms of the license. They replaced the Apache license with their own enterprise license. They said they have the rights to relicense the code. Apache requires that they disclose the origin of the code and what modifications they made. And they lied to YC about that, they don't have any of these rights.

It's not sound business to lie to investors. It's not sound business to violate licenses.