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Sell some stock and come out stronger than competitors. Lobotomizing hurts more if you're good. If you can't, well, that says a lot about the owners and company

Sell some stock and come out stronger than competitors. Lobotomizing hurts more if you're good. If you can't, well, that says a lot about the owners and company when push comes to shove. Not the narrative, but fundamentals. Of course, if $300M is VC ponzi valuation money, this was 80% fake anyways, and dependent on funny math continuing until the company caught up to the hype or exited to Someone Else's Problem, but that was the game being played. Then yes, time to cut. 2K people sucks, but like Uber employees complaining about RSU devaluation.. sucks, but you are the 1% and will ride it out.

conductr 7y ago
I'm not sure how this will play out yet. But even with good fundamentals; we're in a traditional industry and business model not a startup and not software. Just active in an industry consolidation thus M&A. Very predictable revenue and growth rates before now. Question are 1) for current investors, do they want to infuse more cash to avoid the total loss 2) market is crazy so who wants to invest? terms? timing? 3) how do we do it without busting our current covenants. We could probably normally sort through these but not with this time bomb stuck to our chest.
- lmeyerov 7y ago
  The time thing is def hard, and I empathize with employees being both a responsibility yet the no-one-blames-you lever everyone expects right now. At the same time, your top competitors are also getting ready to lobotomize, and the smaller players too. Some of their suppliers/partners are feeling it, and the customers on your market may soon be in need of someone new. So a lot of opportunity for strong co's to come out with power moves on their market, just the $ doesn't get seen for awhile. Contractions create gaps for those who don't, esp as this isn't about industries dying but temporary cash crunches. There is so much VC/PE money out there, that this is a ripe time for them. Their q is 'where' and 'how much of a discount'. I'm obviously quarterbacking here, but similarly as your lever being firing, bank/PE/etc is spending.

conductr 7y ago

I'm not sure how this will play out yet. But even with good fundamentals; we're in a traditional industry and business model not a startup and not software. Just active in an industry consolidation thus M&A. Very predictable revenue and growth rates before now. Question are 1) for current investors, do they want to infuse more cash to avoid the total loss 2) market is crazy so who wants to invest? terms? timing? 3) how do we do it without busting our current covenants. We could probably normally sort through these but not with this time bomb stuck to our chest.

lmeyerov 7y ago
The time thing is def hard, and I empathize with employees being both a responsibility yet the no-one-blames-you lever everyone expects right now. At the same time, your top competitors are also getting ready to lobotomize, and the smaller players too. Some of their suppliers/partners are feeling it, and the customers on your market may soon be in need of someone new. So a lot of opportunity for strong co's to come out with power moves on their market, just the $ doesn't get seen for awhile. Contractions create gaps for those who don't, esp as this isn't about industries dying but temporary cash crunches. There is so much VC/PE money out there, that this is a ripe time for them. Their q is 'where' and 'how much of a discount'. I'm obviously quarterbacking here, but similarly as your lever being firing, bank/PE/etc is spending.