14 ms·
>CEO said there'll be no severance or healthcare. Classy. Learning a lot about how certain people treat their employees during these last couple of admittedly
by vogt 3y ago
>CEO said there'll be no severance or healthcare.
Classy. Learning a lot about how certain people treat their employees during these last couple of admittedly insane years. Good for future reference, I guess - though not much solace now. I feel for the employees.
Edit: Wow, more responses than I thought! I admit that the tone of my comment was too reactionary, but my opinion stands. I won't modify the original comment but instead will add this quote from Dalton Caldwell, YC Partner:
"So what happens if you have less than three months of cash? It's important to face the issue head on and account for your liabilities and the scenario of shutting down your company.
In many cases, <2 months is the point of no return. If you are in this state it is immediately necessary to lay off your employees and give them severance, pay down your obligations, and use your remaining cash for shutdown costs. If you don't do this and instead end up with zero cash and outstanding payroll, tax or other obligations, things will get Very Bad." [1]
Convoy raised $1.1b including a $260mm Series E almost exactly a year ago.
[1] https://www.ycombinator.com/library/3Z-advice-for-companies-with-less-than-1-year-of-runway https://www.ycombinator.com/library/3Z-advice-for-companies-...
- TedDoesntTalk 3y agoIsn’t this standard for startups that shutdown?
- boringg 3y agoIt is. I think the commenter is confused on the difference between layoffs and shutdowns.
- brianwawok 3y agoYes, OP is either from Europe or very entitled or both.
- lawlessone 3y agoWhen did not wanting to be shafted become entitlement?
- jonkho 3y agoNo one is being shafted. With each paycheck, the obligations of the company are met.
- brianwawok 3y agoYou are not “owed” X amount of pay after you lose your job. Maybe you will get it. Maybe you can negotiate it in your employment agreement. But getting paid your agreed rate for hours work isn’t “shafted”
- nebulousthree 3y agoWhen you get on a plane do you think they fuel it to run out exactly at the moment the plane stops at its final destination, and not a drop more? Don't you think that they reserve fuel for emergencies? Why shouldn't a business consider itself at 0 operating dollars but still have a full account for healthcare or equivalent severance?
- pxx 3y agoIt sounds like you shouldn't join a startup then. The very concept here is that you're taking some of this risk.
- drjasonharrison 3y agoThere is risk of not working for another twelve years, of being laid off, or the C-level getting paid out and no one else. But a startup that raises a billion dollars and fails to set a cut-off that gets everyone out the door with their last paycheques is one that people will jump out of earlier.
- camhart 3y agoPlanes prepare for basically 0 chance of failure. Most startups fail. And everyone involved should know that going into it. To operate a startup protecting against all risk will likely guarantee failure in almost all cases.
- mrguyorama 3y ago>Planes prepare for basically 0 chance of failure. NO, the entire point of plane safety is that you are prepared for the VAST MAJORITY OF FAILURES, through extensive planning, testing, regulations that force certain choices, redundancy, backups, etc. Maybe companies should stop trying to play check kiting as SOP for business operation, and be willing to admit that they sucked at business, burned a billion dollars, and didn't even keep any of it to help any of the people who did the work survive for the next few months as they adjust.
- jes5199 3y agototal shutdowns are rare, though. Usually someone wants the IP
- eli 3y agoIt’s common but that’s no excuse
- benced 3y agoEx-Convoy employee here: if a company is shutting down, it obviously can't provide severance. It's not a matter of class or not.
- bart_spoon 3y agoIf things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment.
- poorbutdebtfree 3y ago[dead]
- adastra22 3y agoA startup will never survive long enough to close the next round with that logic.
- bart_spoon 3y agoOf course they will. What is the magic that separates success from failure that apparently only magically appears within the last 4 weeks with operating capital in the bank? Move your time tables up by 4-8 weeks, including funding raises and closing operations, and none of this is an issue.
- adastra22 3y agoAccording to what’s been said, they were chasing opportunities that they thought would finalize within that timeframe. 4-6 weeks ago they had good leads for closing a deal in 4-6 weeks. None of those happened to pan out this time, but every startup has been at a point like this where runway is coming up short. This is normal and expected operating conditions.
- sroussey 3y agoNo, when you are in the fog of war/fundraising, it can be very difficult to decide between 100% let everyone go, verse some other percent where everyone keeps their jobs. Very much depends on the circumstances. If no one was picking up their calls and it was obvious, then sure. Not much is really that clear though. In my tiny case a while back, I wiped my liquid savings to get me employees some time. Can't do that with over a thousand employees though!
- deleted 3y ago[deleted]
- krashidov 3y ago[flagged]
- busterarm 3y agoStartups are not established businesses. They are inherently risky ventures. If you want to be coddled and showered with benefits, go join a Fortune 500. Startups are not for you.
- sushid 3y agoI didn't realize wanting healthcare while getting let go from a company I worked for was desiring to be "coddled."
- oh_sigh 3y agoYou can buy healthcare on the free market. And you aren't being "let go" - the entire company is going under. If you are laid off and the company stays healthy, it makes sense to have some concessions. But if the entire business ceases to exist. I don't know why would you expect anything from it.
- Apocryphon 3y agoWonder if it might make sense for the social safety net to include such a provision for workers of businesses that go under. If we're not going to have universal public coverage, might as well add provision for such an extenuating circumstance as that.
- oh_sigh 3y agoI think it makes perfect sense - in fact, divorcing healthcare entirely from employment.
- camhart 3y agoUnemployment benefits should already apply wouldn't they?
- Apocryphon 3y agoShould provide something better than COBRA
- deleted 3y ago[deleted]
- dicriseg 3y agoHow did they burn that much cash in a year?
- deleted 3y ago[deleted]
- cellis 3y agoCan you add this as a top-level comment? It is a glaring and obvious question.
- actionablefiber 3y agoWhat’s the “Very Bad” scenario? Limited liability stops being limited?
- climatekid 3y agoWonder how big of secondaries the founders took
- jghn 3y agoIn the 2001 DotCom downturn a friend worked at a company where they were informed that the paycheck they had received the prior month was the last payment they'd get. So not only no severance, etc but they also worked a few weeks gratis.
- bhelkey 3y agoUnpaid wages pierce the corporate veil. I am not a lawyer but I believe that in this case the owner can be found personally liable to the employees.
- MaxHoppersGhost 3y agoAh yes, won't someone think of the software engineers who are making 3x-6x the median household income of Americans.
- deleted 3y ago[deleted]
- nilram 3y agoMy favorite start up, with regard to cashflow, was where the CEO would tell us at every company meeting how many months of cash we had in the bank at our current burn. They pissed me off in other ways, though, and I never heard how they treated people when they finally shut their doors.
- jrockway 3y agoSeverance is basically marketing for future hires. You hope, as a company, you will be around in a few years and will be hiring again. If all the employees laid off during tough times get severance, then the company can say "even if we hit tough times, we have a track record of doing the right thing", which is attractive to future employees they are attempting to attract. Since the company is dead, their reputation doesn't matter.