Corgi, a Y Combinator crowdfunding insurance technology startup, says it didn’t steal an open source product.

Y Integrator-backed insurance technology startup Corgi ran into yet another controversy earlier this week when Papermark, a maker of open data warehouse software, accused Corgi of stealing its software and passing it off as its own.

Corgi denies this, telling TechCrunch, “No code from Papermark was used.”

But there were reasons to believe the first allegations, made by Papermark founder Marc Seitz on X, about Corgi’s recently released product called Dataroom.

Seitz’s post went viral because he shared screenshots showing Corgi’s product using the same language for features as Papermark, word for word. Meeting room software is a secure document sharing. It is popularly used by startups to pitch VCs and send them supporting materials with due diligence.

Seitz even called Corgi’s new product copyright and license infringement, as well as “fraud.”

Corgi’s founder and CEO Nico Laqua saw the document and promised to investigate. Soon after, he sent to X his full rejection and his receipts, showing that the code was different between the two products.

Although he strongly denied the allegations of license infringement (“‘stealing my business code’ is a different claim than ‘copying my style,” Laqua said), he acknowledged that the reliance on vibe-coding led to symbolic features.

“Looking back, we should have relied more on our language and visual decisions instead of taking cues from the products in the space, and that’s up to us,” he said.

A Corgi spokesperson confirmed to TechCrunch that the offending features were vibe-coded and said they have already been changed, downplaying the situation.

“The issues were isolated to visual elements on two peripheral settings pages,” the spokesperson told us, adding that these elements were “immediately updated” and that “our team confirmed that no code from Papermark was used.”

Laqua and the spokesperson also accused Papermark of making the allegations because Corgi offers a less expensive product. “I find this annoying since we’re releasing something free that competes with his SaaS. I’d be mad too,” Laqua wrote of Seitz. (Seitz has not yet responded to our request for comment.)

However, this was clearly not just sour grapes when the same features and names were used.

It’s about a new question: If vibe writing makes it easy to copy the look, feel, and entire work of another, while not copying every line of code itself, how important is it if the source isn’t the same?

Obviously, legally speaking, that’s the only thing that matters. So this is not unlike the controversy over Y Combinator alum PearAI, a 2024 startup that has agreed to develop another open source project and release it under its own license.

If we talk about behavior, this is not clear and will increase.

As fellow YC alum and co-founder of the OpenProse agent operating system Dan Barrett explains to X: “In a world where a bot can almost copy 1:1 the structure of an object even if the character-level code diverges … what makes one acceptable and the other unacceptable?

Corgi is now desperately trying to clean up any damage to his reputation. It 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 competes somewhat with Corgi’s coffee shop business, also claims to X that he received a cease-and-desist letter from Corgi’s lawyers for his tweet that mocked the Dataroom controversy. Although X still remembers. There were hundreds of comments and many subtweets. (Corgi also offers a 24-hour coffee shop, with plans to open more, Laqua recently said on the Harry Stebbings podcast.)

This latest hullabaloo adds to the growing list of discussions at Corgi. Two-year-old startups, for example, have a growing reputation for guilt. Various former employees are now being sued.

Laqua also recently went public with his comments on Stebbings’ podcast about how he expects employees to work seven days a week. “Whatever you can do in five days, I promise you, you will do more in six and seven,” he said.

That, of course, is the fallacy of startup culture. Decades of research have repeatedly concluded that human productivity is not a quadratic equation. While sprints can be effective (and friendly) for short-term problems like a site going down, research shows that, as a general practice, long hours of work reduce productivity, not the other way around.

The startup also got tongues wagging at how quickly it raised money at increasing rates, even at AI startup rates. Last month, Corgi raised a Series B1 of $106 million, valuing the company at $2.6 billion, just three weeks after announcing a Series B of $160 million at a value of $1.3 billion and four months after its Series A of $108 million.