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"Okay, it doesn't work out for the employees who become redundant, but that's to be expected." This is actually, you know, a really bad thing for them. They hav

by rw 18y ago

"Okay, it doesn't work out for the employees who become redundant, but that's to be expected." This is actually, you know, a really bad thing for them. They have families and no trust funds.

gizmo 18y ago
I'm not trivializing the matter. Nobody likes to fire and nobody likes to get fired. But a lot of people are let go after every merger - that's just how it works. So if a merger makes sense financially then you have no choice.
- raganwald 18y ago
  There's a very specific fiduciary responsibility with public companies. There are widows with some of their retirement savings invested in tech stocks like YHOO, and the board must act in their interests. I suggest that with YC-scale businesses there's a very different dynamic. Imagine starting such a thing, building it to 100+ employees, and then selling out in such a way that 75+ of your folks are let go by the buying company that just wanted the technology and/or customers. When you go to start your next venture, the VCs will ask how the last one went, and when they hear about the payday for shareholders, they will shower you with money. Everyone likes a winner. But when you go to recruit talent, and they ask you how the last one went, what do you plan to tell them?
  - mattmaroon 18y ago
    Well, ideally your employees who were let go would make a nice chunk off of stock options. Not FU money for the latter half most likely, but a business with 100 employees will generally sell for a pretty good chunk of money.
  - gizmo 18y ago
    You're not making much sense. There's no secret. Nobody's hiding anything. So I would tell them the truth. What could I possibly achieve by lying in the scenario you describe? You're suggesting that people would rather work for somebody with no experience and no money than for somebody who has already built and sold a successful venture? I don't get it.
    - raganwald 18y ago
      I'm saying that people would rather work for someone who has experience building and selling a successful venture where the employees felt they also gained, vs. working for someone with experience building and selling a venture where the employees were laid off and received little for their trouble. Case in point: Some time ago up here in Toronto there was a venture founded by someone who had built a company with much talk of going public but one thing led to another and he sold it to a large US conglomerate. Due to the way the terms worked, most of the people with stock options ended up with a few hundred dollars. As you might expect, the operations were slowly wound down and everything moved to the buyer's head offices state side. People found other work. One tech manager put it this way: "I got big screen TV money out of the deal, but I wanted house money or at least car money." He told me this while explaining why he was avoiding calls from head hunters staffing up the founder's new company. The net-net of what I'm trying to say is that if you are running a smaller start-up, and you might want to do it again, consider making sure that the employees perceive they benefit from the deal and not just the major shareholders. You make the call.

by rw 18y ago

"Okay, it doesn't work out for the employees who become redundant, but that's to be expected." This is actually, you know, a really bad thing for them. They have families and no trust funds.

gizmo 18y ago

I'm not trivializing the matter. Nobody likes to fire and nobody likes to get fired. But a lot of people are let go after every merger - that's just how it works. So if a merger makes sense financially then you have no choice.

raganwald 18y ago
There's a very specific fiduciary responsibility with public companies. There are widows with some of their retirement savings invested in tech stocks like YHOO, and the board must act in their interests. I suggest that with YC-scale businesses there's a very different dynamic. Imagine starting such a thing, building it to 100+ employees, and then selling out in such a way that 75+ of your folks are let go by the buying company that just wanted the technology and/or customers. When you go to start your next venture, the VCs will ask how the last one went, and when they hear about the payday for shareholders, they will shower you with money. Everyone likes a winner. But when you go to recruit talent, and they ask you how the last one went, what do you plan to tell them?
- mattmaroon 18y ago
  Well, ideally your employees who were let go would make a nice chunk off of stock options. Not FU money for the latter half most likely, but a business with 100 employees will generally sell for a pretty good chunk of money.
- gizmo 18y ago
  You're not making much sense. There's no secret. Nobody's hiding anything. So I would tell them the truth. What could I possibly achieve by lying in the scenario you describe? You're suggesting that people would rather work for somebody with no experience and no money than for somebody who has already built and sold a successful venture? I don't get it.
  - raganwald 18y ago
    I'm saying that people would rather work for someone who has experience building and selling a successful venture where the employees felt they also gained, vs. working for someone with experience building and selling a venture where the employees were laid off and received little for their trouble. Case in point: Some time ago up here in Toronto there was a venture founded by someone who had built a company with much talk of going public but one thing led to another and he sold it to a large US conglomerate. Due to the way the terms worked, most of the people with stock options ended up with a few hundred dollars. As you might expect, the operations were slowly wound down and everything moved to the buyer's head offices state side. People found other work. One tech manager put it this way: "I got big screen TV money out of the deal, but I wanted house money or at least car money." He told me this while explaining why he was avoiding calls from head hunters staffing up the founder's new company. The net-net of what I'm trying to say is that if you are running a smaller start-up, and you might want to do it again, consider making sure that the employees perceive they benefit from the deal and not just the major shareholders. You make the call.