Secret Founders Pulled Off $6 Million 'Bank Heist' While Raising Funding: Investor

Don’t count Bill Maris among those surprised that the social-networking application Secret had to shut down. The Google Ventures managing partner and president told the New York Times that, to him, the way the co-founders of the app conducted themselves was a reminder about how not to behave in Silicon Valley boardrooms.

Co-founded by David Byttow and Chrys Bader, Secret -- an addictive app that allowed users to share anonymous messages with friends -- was released to a flurry of media attention in January 2014. Byttow and Bader tapped Google Ventures and another prominent venture-capital firm during an early funding round only to come back a few months later in an attempt to raise another $25 million.

Google Ventures advised against it, saying so much extra money would put too much pressure on the fledglng company. Then, Maris found out Byttow and Bader each took $3 million for themselves.

“It was like a bank heist,” Maris told the Times. “That’s not how you do a startup.” Byttow declined to comment, and Bader did not respond to a request for comment, the newspaper reported.

Byttow reportedly used a portion of his $3 million to purchase a red Ferrari while his company was on the downslide. It’s unclear whether the co-founders will return any of the so-called heist money in conjunction with the firm’s planned return of capital to its investors.

“I think they should return all the money,” Maris told the Times.

Secret turned itself into formidable competition for apps such as Whisper and Yik Yak, although it became obvious the end was approaching in recent months. Bader left the operation in January, and Secret, like its competitors, became a place where bullies could abuse targets online without any fear of repercussions.