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it depends on how (and how well) you structure it. If the company has no debt, you can fold it and walk, obviously. Often you can find someone else willing
by lsc 16y ago
it depends on how (and how well) you structure it. If the company has no debt, you can fold it and walk, obviously. Often you can find someone else willing to buy it off you for a pittance, if you want someone to keep providing for the customers you have.
If the corp has debt you haven't countersigned personally, you can still usually walk, though if it's a lot of debt the creditors can try to 'pierce the veil' and come after you personally. depending on how well you separated business and personal accounts, this may or may not be possible.
If you have debt you countersigned personally, well, you've gotta pay that off or declare personal bankruptcy.
The worst 'baggage for the rest of time' case I've seen is tax related. If you make a lot of revenue and you fuck up your taxes badly, you can be on the hook for those taxes forever. Bankruptcy doesn't get you out of your tax debts. I know two people who will likely be in debt for the rest of their lives because of tax mistakes. If you run a business, /always/ spend the money on someone who knows about taxes.
anyhow, that's just the debt problem. My experience has been that employers, when you tell them that you are looking for a job because your startup in a related field failed can only be described as eager. Especially if the startup got some publicity, a failed startup looks pretty good on the resume.
edit: s/debit/debt/
- dotBen 16y agoa failed startup looks pretty good on the resume. I would say this is true in US, especially in the entrepreneurial regions (here in SV/SF and also the NY/Boston/DC triangle). Probably less so in Europe and the UK. I'd like to think that is changing but we're still a cynical lot back home (in the UK).
- mattmanser 16y agoAny evidence for that? My 2nd job was at a failed startup in the UK. Never got a single raised eye brow in any interviews I went to after that and I got a glowing reference from the CEO. It was a massive positive for me, so not sure why you think this.
- dotBen 16y agoAny evidence for that? Yup, I was involved in hiring positions at a big company in London and had some of my candidates down-graded in the committee because the startup they worked at failed (thus they must be a failure). (ok, you could argue this is BigCo thinking, but I don't think it would occur at the big companies here in SF/SV) Also anecdotal evidence from friends who have been in this boat. Banks are especially cruel as it's all about 'being the big dog' and weakness and failure isn't tolerated at any level (ok, you could find that ironic given what happened to the bank industry - but it's hard to argue when you are the one interviewing. Plus most people in the banking industry still don't seem to accept they had any fault, grrr).
- barrydahlberg 16y agoSo hire an accountant, be careful what debt you create and it's not really that scary?
- lsc 16y agopretty much. On the other hand, when you are running your company, you will quite often make decisions that, if you decide wrong, will result in failure of the company. For some people, knowing that their company is one or two mistakes away from failure is pretty scary. But yeah, especially here in the US, the actual consequences of having a failed company, barring debt, are mostly positive.
- deleted 16y ago[deleted]
- markstansbury 16y agoCheck.
- markstansbury 16y agoMate.
- eof 16y agofyi, it's debt
- markstansbury 16y agolsc makes some good points. One of the biggest, which I'll reiterate because it's so big: Run your business like a business! Hold board meetings, even if it's just you and your mom. Keep separate bank accounts, even if it's just for 40 bucks. Make everything look legit, so when it comes before a court the court can say it was an independent entity. (Courts prefer to say that.) In other words, don't treat your business like it's your personal piggy bank. That will lead to pain.