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What makes you think the executives are making anything from this? It's a startup, it ran out of money, it failed, there is nothing left. Joining a startup is r

What makes you think the executives are making anything from this? It's a startup, it ran out of money, it failed, there is nothing left. Joining a startup is risky.

ctvo 3y ago
Shutting down 3 months earlier, but everyone getting severance is an option. Let's not pretend it had to happen this way because it's a startup. They made the decision, if true, to use up every cent clinging on trying to find an exit or more runway.
- pxx 3y ago
  The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. As such, spending your last cent to try to find a lifeline makes far more sense than calling it quits early. It's also certainly not in the interests of investors to just call things off.
  - mrguyorama 3y ago
    >It's also certainly not in the interests of investors to just call things off. And of course, we should prioritize a class of people who BY DEFINITION have significantly more resources available to keep themselves alive and safe and happy over the well being of 500 normal people.
  - ctvo 3y ago
    > The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. Convoy knows their situation very well, and it hasn't changed for 6 months. As investors and founders you can make the call and be responsible to your employees, maintaining a good reputation for yourself (as founders), and enabling future deal flow (as investors) or this situation where they get 0 help transitioning. This wasn't an early stage company. They're a late stage (series D iirc?) company that was valued at 1 billion+ with 5000 employees. It's not fair to characterize this with the same risk profile as an early stage co., and the expectations here should be higher in terms of severance and help.
    - ako 3y ago
      As an employee you also know what situation you’re in, they already downsized from 1500 to 500. That in itself should be warning enough that you’re working at a very risky company.
- paulddraper 3y ago
  > They made the decision, if true, to use up every cent clinging on trying to find an exit or more runway. Indeed. "We hoped this day would never come. We spent over 4 months exhausting all viable strategic options for the business."
escaper 3y ago
Can we stop calling companies with 1,500+ employees and millions in revenue "startups". At what point does the shine wear off and they just become medium-sized companies like any other?
- iepathos 3y ago
  By definition, a startup is any newly established company. We can argue over how much time defines what is newly established, but can't argue that the size, revenue, or money raised define what is new.
  - omneity 3y ago
    The definition of a startup is a company that is still searching for a viable business model / target customers / distribution channel. The size, age, amount raised or even revenue doesn't matter. Only that whatever revenue it has, it is sustainable, and customer acquisition is repeatable.
- paulddraper 3y ago
  > 1,500+ employees They used to have 1,500, before they laid off 1,000 of them.
vic-traill 3y ago
>It's a startup, it ran out of money, it failed, there is nothing left It may not be that clear cut ... From the article: The startup, valued by investors last year at $3.8 billion, had already whittled its staff down to about 500 people from a peak of 1,500, and was on track to run out of money in a matter of weeks
- mywittyname 3y ago
  Private party valuations are essentially made up figures.
- akavi 3y ago
  I don't see where you're seeing execs making any money off of Convoy in that quote. If there are any outstanding debt obligations (which I expect there are), then those would be senior to voluntary severance even if the company hadn't spent its literal last dollar.
  - vic-traill 3y ago
    was on track to run out of money in a matter of weeks (from TFA) != it ran out of money, it failed, there is nothing left (your comment) I appreciate you were focused on the exec compensation part of the dialogue. Just noting that the money was not yet all gone.
Johnny555 3y ago
What makes you think the executives are making anything from this? It's a startup, it ran out of money, it failed, there is nothing left. Joining a startup is risky. Because the executives (almost) always make sure that they are compensated before the fall.
- adastra22 3y ago
  Not when a company shuts down like this. If they did, the investors would claw it all back through the courts. The founders and executives walk away from this with $0.
  - wferrell 3y ago
    Not if they sold secondaries.
    - adastra22 3y ago
      Sure they may have made money from a sale months or years ago. But they’re not walking away from this incident with a payout.
  - ska 3y ago
    > The founders and executives walk away from this with $0. Often after having forgone salary for a while, also.
    - rchaud 3y ago
      How many people are leading a 1500-headcount company on a zero salary? Even Steve Jobs couldn't do it without backdating options to make himself Rockefeller while acting like Gandhi.
lawlessone 3y ago
>What makes you think the executives are making anything from this? If the CEO was still speaking for the company then he's being paid.
- freedomben 3y ago
  I don't know about Convoy specifically but generally speaking it's not even certain a CEO is getting a paycheck at all, even when the company is still solvent. Some take all their compensation as stock, especially while it's early days and risk is high. If it's not certain they are getting paid even while things are still working, how can you say he is getting paid after running out of money? Unless you mean "paid with worthless stock" in which case I would say "you can't fund severance and health care with worthless stock."
  - FireBeyond 3y ago
    Seed and early days perhaps, but when you're taking hundreds of millions in funding, let's not act like CEOs are saying "Oh, I don't need to be paid, it's fine".
climatekid 3y ago
The founders probably took millions in secondary offerings
rvba 3y ago
In europe companies are supposed to make accruals for this. Accrue the money, bankrupt one month earlier. Pay the money. Of course this means companies think twice before hiring anyone.
- addicted 3y ago
  Companies would only do that if required by law because otherwise it’s a huge advantage for your competitor that’s not doing that. So yeah, if one thinks this is wrong, they need to take it up with their lawmakers. This is not something private companies can change on their own, otherwise all the well behaved companies would be much more likely to go out of business and only the poorly behaved ones would remain.

What makes you think the executives are making anything from this? It's a startup, it ran out of money, it failed, there is nothing left. Joining a startup is risky.

ctvo 3y ago

Shutting down 3 months earlier, but everyone getting severance is an option. Let's not pretend it had to happen this way because it's a startup. They made the decision, if true, to use up every cent clinging on trying to find an exit or more runway.

pxx 3y ago
The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. As such, spending your last cent to try to find a lifeline makes far more sense than calling it quits early. It's also certainly not in the interests of investors to just call things off.
- mrguyorama 3y ago
  >It's also certainly not in the interests of investors to just call things off. And of course, we should prioritize a class of people who BY DEFINITION have significantly more resources available to keep themselves alive and safe and happy over the well being of 500 normal people.
- ctvo 3y ago
  > The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. Convoy knows their situation very well, and it hasn't changed for 6 months. As investors and founders you can make the call and be responsible to your employees, maintaining a good reputation for yourself (as founders), and enabling future deal flow (as investors) or this situation where they get 0 help transitioning. This wasn't an early stage company. They're a late stage (series D iirc?) company that was valued at 1 billion+ with 5000 employees. It's not fair to characterize this with the same risk profile as an early stage co., and the expectations here should be higher in terms of severance and help.
  - ako 3y ago
    As an employee you also know what situation you’re in, they already downsized from 1500 to 500. That in itself should be warning enough that you’re working at a very risky company.
paulddraper 3y ago
> They made the decision, if true, to use up every cent clinging on trying to find an exit or more runway. Indeed. "We hoped this day would never come. We spent over 4 months exhausting all viable strategic options for the business."

escaper 3y ago

Can we stop calling companies with 1,500+ employees and millions in revenue "startups". At what point does the shine wear off and they just become medium-sized companies like any other?

iepathos 3y ago
By definition, a startup is any newly established company. We can argue over how much time defines what is newly established, but can't argue that the size, revenue, or money raised define what is new.
- omneity 3y ago
  The definition of a startup is a company that is still searching for a viable business model / target customers / distribution channel. The size, age, amount raised or even revenue doesn't matter. Only that whatever revenue it has, it is sustainable, and customer acquisition is repeatable.
paulddraper 3y ago
> 1,500+ employees They used to have 1,500, before they laid off 1,000 of them.

vic-traill 3y ago

>It's a startup, it ran out of money, it failed, there is nothing left It may not be that clear cut ... From the article: The startup, valued by investors last year at $3.8 billion, had already whittled its staff down to about 500 people from a peak of 1,500, and was on track to run out of money in a matter of weeks

mywittyname 3y ago
Private party valuations are essentially made up figures.
akavi 3y ago
I don't see where you're seeing execs making any money off of Convoy in that quote. If there are any outstanding debt obligations (which I expect there are), then those would be senior to voluntary severance even if the company hadn't spent its literal last dollar.
- vic-traill 3y ago
  was on track to run out of money in a matter of weeks (from TFA) != it ran out of money, it failed, there is nothing left (your comment) I appreciate you were focused on the exec compensation part of the dialogue. Just noting that the money was not yet all gone.

Johnny555 3y ago

What makes you think the executives are making anything from this? It's a startup, it ran out of money, it failed, there is nothing left. Joining a startup is risky. Because the executives (almost) always make sure that they are compensated before the fall.

adastra22 3y ago
Not when a company shuts down like this. If they did, the investors would claw it all back through the courts. The founders and executives walk away from this with $0.
- wferrell 3y ago
  Not if they sold secondaries.
  - adastra22 3y ago
    Sure they may have made money from a sale months or years ago. But they’re not walking away from this incident with a payout.
- ska 3y ago
  > The founders and executives walk away from this with $0. Often after having forgone salary for a while, also.
  - rchaud 3y ago
    How many people are leading a 1500-headcount company on a zero salary? Even Steve Jobs couldn't do it without backdating options to make himself Rockefeller while acting like Gandhi.

lawlessone 3y ago

>What makes you think the executives are making anything from this? If the CEO was still speaking for the company then he's being paid.

freedomben 3y ago
I don't know about Convoy specifically but generally speaking it's not even certain a CEO is getting a paycheck at all, even when the company is still solvent. Some take all their compensation as stock, especially while it's early days and risk is high. If it's not certain they are getting paid even while things are still working, how can you say he is getting paid after running out of money? Unless you mean "paid with worthless stock" in which case I would say "you can't fund severance and health care with worthless stock."
- FireBeyond 3y ago
  Seed and early days perhaps, but when you're taking hundreds of millions in funding, let's not act like CEOs are saying "Oh, I don't need to be paid, it's fine".

climatekid 3y ago

The founders probably took millions in secondary offerings

rvba 3y ago

In europe companies are supposed to make accruals for this. Accrue the money, bankrupt one month earlier. Pay the money. Of course this means companies think twice before hiring anyone.

addicted 3y ago
Companies would only do that if required by law because otherwise it’s a huge advantage for your competitor that’s not doing that. So yeah, if one thinks this is wrong, they need to take it up with their lawmakers. This is not something private companies can change on their own, otherwise all the well behaved companies would be much more likely to go out of business and only the poorly behaved ones would remain.