Y Combinator-backed insurtech startup Corgi was embroiled in another controversy earlier this week when open source data room software maker Papermark accused Corgi of stealing software and passing it off as its own.
Corgi denied this, telling TechCrunch that “no code was used by Papermark.”
But there was reason for people to believe the initial claims made by Papermark co-founder Marc Seitz at X about Corgi’s newly launched product, Dataroom.
Seitz’s post exploded because he shared, word for word, screenshots showing the Corgi product using the same language for the same features as Papermark. Dealroom software is inherently secure document sharing. It is popularly used by startups to pitch to VCs and send application materials for due diligence.
Seitz even claimed that Corgi’s new product was a copyright and licensing infringement and a “fraud.”
Corgi co-founder and CEO Nico Laqua saw the tweet and promised to investigate. Soon after, he posted his entire denial to X, along with his receipt, showing that the two products had different codes.
Although he strongly disputed the allegations of licensing violations (“‘Stealing my corporate code’ is a different claim than ‘copying my style,'” Laqua argued), he acknowledged that he relied on Vibe’s coding design to create the clone feature.
“In retrospect, we should have leaned more on our own language and visual choices rather than taking cues from existing products in the space, but that’s on us,” he posted.
A Corgi spokesperson downplayed the situation, telling TechCrunch that the offending feature was Vibe-coded and had already been changed.
“The issue was isolated to visual elements on two surrounding settings pages,” the spokesperson said, adding that these elements were “immediately updated” and that “our team confirmed that no code was used in Papermark.”
Laqua and a spokesperson also accused Papermark of making this accusation because Corgi offers a cheaper product. “This bothers me because we are putting out a free product that competes with his SaaS. I would be upset too,” Laqua wrote of Seitz. (Seitz has not yet responded to our request for comment.)
However, when using the same characteristics and expressions, it is clear that these were not just sour grapes.
It’s about a new question. If vibe coding makes it easy to copy the look, feel, and all the functionality of someone else’s work without having to copy every line of the code itself, how important is it that the source code isn’t identical?
Obviously, legally speaking, that’s the only problem. So this is not the same as the controversy over PearAI, a 2024 startup Y Combinator graduate that admitted to cloning other open source projects and releasing them under its own license.
Morally speaking, this is ambiguous and will become increasingly common.
Dan Barrett, fellow YC alumnus and founder of agent operating system OpenProse, described X: “In a world where a bot can simply copy the structure of something 1:1 even if the character-level code is different… what makes one unacceptable and the other unacceptable? Is it ancillary to existing IP laws, the existing world? Isn’t there a larger principle at work here?”
Corgi is now actively working to repair the damage to its reputation. The company confirmed to TechCrunch that it sent Seitz a cease-and-desist letter asking him to take down the tweets.
The founder of Hello World Cafe, which competes to some extent with Corgi’s coffee shop business, also claims that he received a cease-and-desist letter from Corgi’s attorney in response to a tweet in which X joked about the data room controversy. I still remember X. There were hundreds of comments and countless sub-tweets. (Corgi also offers a 24-hour coffee shop and has plans to open more, Laqua said recently on Harry Stebbings’ podcast.)
This latest hullabaloo adds to the growing list of conversations around Corgis. For example, the two-year-old startup has an increasingly litigious reputation. It has already sued various former employees.
Laqua also recently went viral for his comments on Stebbings’ podcast about how employees are expected to work seven days a week. “If you can do anything in five days, I promise you you can do more in six or seven days,” he said.
Of course, this is the error of startup hustle culture. Decades of research have repeatedly concluded that human productivity is not quadratic. Sprints can be effective for short-term problems like site crashes and can build camaraderie, but research shows that more time on a daily basis reduces productivity, not the other way around.
The startup has also set tongues wagging over how quickly it raised funding, giving it a high valuation even by AI startup standards. Last month, Corgi valued the company at $2.6 billion, three weeks after announcing a $160 million Series B at a $160 million valuation, and four months after announcing a $108 million Series A.
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