Y Combinator-backed insurance tech startup Corgi was embroiled in yet another controversy earlier this week when Papermark, a maker of open source software for data rooms, accused Corgi of stealing its software and passing it off as its own.
Corgi denies it. “No code from Papermark was used,” the company tells TechCrunch.
But there were reasons why people believed the original claim, which was made by Papermark co-founder Marc Seitzin X and it was about Corgi’s new product that was released called Dataroom. Deal Room software is essentially secure document sharing. Famously used by startups to pitch to VCs and send them supporting material for due diligence.
Seitz’s post blew up because he shared screenshots showing Corgi’s product using the same language for the same features as Papermark, word for word. He went so far as to call Corgi’s new product a copyright and license violation and a “scam.”
Corgi co-founder and CEO Nico Laqua saw the tweet and promised to investigate. Soon after, he replied to X with a complete denial, indicating that the code was different between the two products.
While he vehemently denied claims of license infringement—arguing that “copying my style” is a different claim than “stealing corporate code”—he admitted that basing it on a vibe coding scheme led to the copycat features.
“Looking back, we should have leaned more into our own language and visual choices instead of taking cues from existing products in the space, and that’s up to us,” he posted.
A Corgi spokesperson confirmed to TechCrunch that the offending features were vibe-coded and said they have already changed, downplaying the situation.
“The issues were isolated to visual elements on two regional settings pages,” the spokesperson told us, adding that those elements were “immediately updated” and that “our team confirmed that no code from Papermark was used.”
Laqua and the representative also accused Papermark of making these charges because Corgi offers a less expensive product. “I understand this stings as we put out something mostly free that competes with his SaaS. I’d be mad too,” Laqua wrote of Seitz. Sage did not respond to a request for comment.
Copying visuals and the same feature language, however, got over sour grapes as a credible complaint. It raises a new and thornier question: If vibe coding makes it so easy to copy the look, feel, and every function of someone else’s work while not copying every line of your own code, how much does it matter if the source isn’t identical?
Obviously, legally, that’s all that matters. So this isn’t the same as the controversy over Y Combinator alum PearAI, a 2024 startup that admitted it cloned another open source project and released it under its own license.
From a moral point of view, this is ambiguous and will become more and more common.
As a fellow YC citizen and founder of the agent operating system OpenProse Dan Barrett explained in X: “In a world where a robot can casually copy 1:1 the structure of something, even if the character-level code deviates … what makes one unacceptable and the other not? the existing IP law, incidental to the old world? isn’t there some greater principle at work here?”
Corgi is now vigorously trying to clean up any reputational damage. It has issued a cease and desist letter to Seitz demanding that he take down the tweet, the company confirmed to TechCrunch. The founder of Hello World Cafe, which partially competes with Corgi’s coffee business, he says too received a cease and desist from Corgi’s lawyers for a tweet joking about the Dataroom controversy. Although X still remembers. There have been hundreds of comments and countless subtweets.
This is not the first time that Corgi has been accused of heavy legal tactics. In May, competitor Matcha accused the company of bullying behaviora controversy that unfolded alongside a separate lawsuit. The two-year-old startup has also sued various former employees and developed a growing reputation for litigation.
(Corgi also offers a 24-hour coffee shop, with plans to open more, Laqua recently told VC The Harry Stebbings Podcast.)
This latest hullabaloo adds to a growing list of chatter surrounding the Corgi. The two-year-old startup, for example, has a growing reputation for litigation. It already is sued various former employees.
Laqua also recently went viral for his comments on the Stebbings podcast about how he expects employees to work seven days a week. “What you can do in five days, I promise you, you will do more in six and seven,” he said.
This is, of course, the fallacy of the hustle startup culture. Decades since the survey ends repeatedly that human productivity is not a quadratic equation. While sprints can be effective and create camaraderie for short-term problems like website downtime, research shows that, as a matter of routine, longer working hours reduce productivitynot the other way around.
The startup was also learning about how quickly it has raised money at rising valuations, even by AI startup standards. Last month, Corgi raised a $106 million Series B, valuing the company at $2.6 billion, just three weeks after announcing a $160 million Series B at a $1.3 billion valuation and four months after its $108 million Series A.
Corgi also operates a 24-hour coffee shop, with plans to open more, Laqua said on the Stebbings podcast.
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