3 ms·

My guess is the founder was frantically trying to raise money somewhere. That would make such behavior slightly more rational, I suppose, though no less crimina

My guess is the founder was frantically trying to raise money somewhere. That would make such behavior slightly more rational, I suppose, though no less criminal.

Bartweiss 9y ago
Almost certainly. That would both make it feel more ethical to the founder ("I'm just bridging the gap!") and look less useless ("If I can make it to Friday they'll get all the backpay, there's no problem!"). Without new money on the horizon it's simply incoherent, to say nothing of immoral. Of course, none of that makes it right. There are plenty of startups that handle this without cheating successfully. I've gotten the phone call saying "we can't pay you now, but here's our fundraising schedule and when we expect to have money". It might lose you some staff, but I think it's not as bad as most people expect - either the situation looks good and people stay, or the situation looks bad and you weren't going to save the company regardless.
- pmiller2 9y ago
  How does that kind of situation ever look good? Failure to make payroll means you no longer have a company.
  - ferentchak 9y ago
    I know of a company where the owner oftentimes bounced payroll checks (before common direct deposit) for years. Last I checked that company sells ~400 million dollars of goods at a solid margin and prints money while all of his competitors are going to dust. I am sure it's an uncommon story but in his case the hustle worked out for him. In short it doesn't look good but sometimes at least it works.
gmarx 9y ago
and if the startup had ultimately been successful this would be part of the founding myth and many people would think it was a positive
- austenallred 9y ago
  Nah, if he had hustled somehow to make people believe and stay on for a week it would be a positive. Not sure forging wire transfers is ever a positive.

3 ms·

My guess is the founder was frantically trying to raise money somewhere. That would make such behavior slightly more rational, I suppose, though no less crimina

by austenallred 9y ago

My guess is the founder was frantically trying to raise money somewhere. That would make such behavior slightly more rational, I suppose, though no less criminal.

Bartweiss 9y ago
Almost certainly. That would both make it feel more ethical to the founder ("I'm just bridging the gap!") and look less useless ("If I can make it to Friday they'll get all the backpay, there's no problem!"). Without new money on the horizon it's simply incoherent, to say nothing of immoral. Of course, none of that makes it right. There are plenty of startups that handle this without cheating successfully. I've gotten the phone call saying "we can't pay you now, but here's our fundraising schedule and when we expect to have money". It might lose you some staff, but I think it's not as bad as most people expect - either the situation looks good and people stay, or the situation looks bad and you weren't going to save the company regardless.
- pmiller2 9y ago
  How does that kind of situation ever look good? Failure to make payroll means you no longer have a company.
  - ferentchak 9y ago
    I know of a company where the owner oftentimes bounced payroll checks (before common direct deposit) for years. Last I checked that company sells ~400 million dollars of goods at a solid margin and prints money while all of his competitors are going to dust. I am sure it's an uncommon story but in his case the hustle worked out for him. In short it doesn't look good but sometimes at least it works.
gmarx 9y ago
and if the startup had ultimately been successful this would be part of the founding myth and many people would think it was a positive
- austenallred 9y ago
  Nah, if he had hustled somehow to make people believe and stay on for a week it would be a positive. Not sure forging wire transfers is ever a positive.