6 ms·

If 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 so

If 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 ago
A startup will never survive long enough to close the next round with that logic.
- bart_spoon 3y ago
  Of 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 ago
    According 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 ago
    No, 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!
  - avalys 3y ago
    If you can still operate the business for another 8 weeks, there's a chance that things will still work out, and it's pretty pessimistic to preemptively shut it down because you assume you're going to fail. Pessimists don't generally find themselves in the role of founder/CEO of a startup in the first place.
    - arrosenberg 3y ago
      Actually good founders and CEOs do tend to be realists. They know when to hold and when to fold, and they place a high value the well being of the people especially when things go poorly. Manic founders who insist that a rescue will come right up until the last second often leave people feeling burned and don't get as many second chances when things don't go well.
    - ska 3y ago
      > there's a chance that things will still work out, There is a big difference between a less than 1% chance and an 80% chance here. Part of the job is knowing that difference, and how to handle/communicate it.
    - pc86 3y ago
      Especially when you're only doing it so you can pay your employees 8 weeks' severance when the alternative is 6 or 8 weeks' pay while working.
  - mhandley 3y ago
    Exactly that magic happened with our startup last year.
  - michaelt 3y ago
    > 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? I've heard it said that every boss of a failed company will tell you that they almost got a last minute investment, or almost made a big sale, or almost got acquired, if they'd only had an extra week or two it'd have all been different. Of course that could be wishful thinking - or a sign that in the final days they were offering fire sale prices.
- rvba 3y ago
  There are those (rare?) cases of bootstrapping
deleted 3y ago
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deleted 3y ago
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andrewmutz 3y ago
Probably they used those two months to try to find a buyer for the company
v1l 3y ago
Entitlement is more prevalent than we think.
- jonkho 3y ago
  Yep people talk like they are owed something. They are not. Outstanding obligations are met with each paycheck.
itsoktocry 3y ago
>If 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. This might be true, but personally I'd rather the company try to remain a going concern.
- deleted 3y ago
  [deleted]
- sangnoir 3y ago
  > This might be true, but personally I'd rather the company try to remain a going concern. You could refuse the severance as an employee if you wish to go down swinging. Edit: Knowing the company is doomed in a month or 2 and not employees offering severance is not a good thing yo do, in my book.
  - JumpCrisscross 3y ago
    > Knowing the company is doomed in a month or 2 and not alerting employees is not a good thing yo do, in my book Has anyone at Convoy claimed this?
    - sangnoir 3y ago
      Not just alerting, but offering severance. No one at Convoy was offered severance - now or in the past month. I edited my earlier comment to reflect my meaning.
      - JumpCrisscross 3y ago
        > Not just alerting, but offering severance Separate questions. You said the company knew it was "doomed in a month or 2 and [did] not [alert] employees." I've seen them messaging pain since their multiple rounds of layoffs last year and this [1], as well as in August [2]. Moreover, I haven't seen claims of employees being blindsided (as Yellow drivers were). [1] https://www.geekwire.com/2023/trucking-marketplace-convoy-makes-more-layoffs-citing-customer-service-efficiency-gains/ https://www.geekwire.com/2023/trucking-marketplace-convoy-ma... [2] https://www.theinformation.com/articles/digital-trucking-company-convoy-explores-options-including-a-sale?rc=gtdonx https://www.theinformation.com/articles/digital-trucking-com...
tejohnso 3y ago
Tesla wouldn't exist if Elon had shut down at the 2 month dire point. At least, I recall him saying they were at one point about 2 days away from bankruptcy. Not surprising though, that Elon would be in the same camp as this Convoy CEO, not likely to shed too many tears over worker concerns.
- deleted 3y ago
  [deleted]
- MourYother 3y ago
  Everyone at Tesla would be better without the manchild.
- shafyy 3y ago
  And Elon hasn't been known to exaggerate greatly or lie, so this must be true.
  - signatoremo 3y ago
    Who knows if it was two days away from bankruptcy, but Tesla and SpaceX were very close to running out of money in 2008: https://www.businesstoday.in/amp/technology/news/story/elon-musks-christmas-eve-miracle-how-he-saved-tesla-from-bankruptcy-398108-2023-09-12 https://www.businesstoday.in/amp/technology/news/story/elon-... Also where were you during 2017, 2018 period when the doomsayers (aka TESLAQ) predicted the same so often? So much so that this tweet became famous? https://x.com/elonmusk/status/980566116614291456?s=46&t=yN2X3Lb3pCLOqlCC9FRNxg https://x.com/elonmusk/status/980566116614291456?s=46&t=yN2X...
    - shafyy 3y ago
      I don't dispute that they were close to running out of money, but what does "2 days" even mean in that context? It probably means that soon they would have needed to decide when to start the bankrucpty procedues or something.
- sokoloff 3y ago
deleted 3y ago
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jahewson 3y ago
No a company cannot begin winding up without reaching an agreement with its creditors - the winding up process is a de-facto admission of insolvency and the company needs to declare bankruptcy and the creditors get first dibs on the assets. It’s nothing like a layoff. For example, imagine that you are a supplier to company A and now your contract is both unpaid and cancelled and you’re going to have to lay off some of your own staff. Do you recover the contract money from company A, to give your staff severance? Or can company A stiff you and use it to give their own staff severance? (No, they can’t.)
pc86 3y ago
What about 2 months before that? 2 months earlier still? Another 6? They raised $260M a year ago and it sounds like an extraordinarily capital-intensive business. It's pretty easy to say "oh you should have done this differently" with almost zero actual knowledge of the situation or experience.

If 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 ago

A startup will never survive long enough to close the next round with that logic.

bart_spoon 3y ago
Of 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 ago
  According 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 ago
  No, 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!
- avalys 3y ago
  If you can still operate the business for another 8 weeks, there's a chance that things will still work out, and it's pretty pessimistic to preemptively shut it down because you assume you're going to fail. Pessimists don't generally find themselves in the role of founder/CEO of a startup in the first place.
  - arrosenberg 3y ago
    Actually good founders and CEOs do tend to be realists. They know when to hold and when to fold, and they place a high value the well being of the people especially when things go poorly. Manic founders who insist that a rescue will come right up until the last second often leave people feeling burned and don't get as many second chances when things don't go well.
  - ska 3y ago
    > there's a chance that things will still work out, There is a big difference between a less than 1% chance and an 80% chance here. Part of the job is knowing that difference, and how to handle/communicate it.
  - pc86 3y ago
    Especially when you're only doing it so you can pay your employees 8 weeks' severance when the alternative is 6 or 8 weeks' pay while working.
- mhandley 3y ago
  Exactly that magic happened with our startup last year.
- michaelt 3y ago
  > 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? I've heard it said that every boss of a failed company will tell you that they almost got a last minute investment, or almost made a big sale, or almost got acquired, if they'd only had an extra week or two it'd have all been different. Of course that could be wishful thinking - or a sign that in the final days they were offering fire sale prices.
rvba 3y ago
There are those (rare?) cases of bootstrapping

deleted 3y ago

[deleted]

deleted 3y ago

[deleted]

andrewmutz 3y ago

Probably they used those two months to try to find a buyer for the company

v1l 3y ago

Entitlement is more prevalent than we think.

jonkho 3y ago
Yep people talk like they are owed something. They are not. Outstanding obligations are met with each paycheck.

itsoktocry 3y ago

>If 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. This might be true, but personally I'd rather the company try to remain a going concern.

deleted 3y ago
[deleted]
sangnoir 3y ago
> This might be true, but personally I'd rather the company try to remain a going concern. You could refuse the severance as an employee if you wish to go down swinging. Edit: Knowing the company is doomed in a month or 2 and not employees offering severance is not a good thing yo do, in my book.
- JumpCrisscross 3y ago
  > Knowing the company is doomed in a month or 2 and not alerting employees is not a good thing yo do, in my book Has anyone at Convoy claimed this?
  - sangnoir 3y ago
    Not just alerting, but offering severance. No one at Convoy was offered severance - now or in the past month. I edited my earlier comment to reflect my meaning.
    - JumpCrisscross 3y ago
      > Not just alerting, but offering severance Separate questions. You said the company knew it was "doomed in a month or 2 and [did] not [alert] employees." I've seen them messaging pain since their multiple rounds of layoffs last year and this [1], as well as in August [2]. Moreover, I haven't seen claims of employees being blindsided (as Yellow drivers were). [1] https://www.geekwire.com/2023/trucking-marketplace-convoy-makes-more-layoffs-citing-customer-service-efficiency-gains/ https://www.geekwire.com/2023/trucking-marketplace-convoy-ma... [2] https://www.theinformation.com/articles/digital-trucking-company-convoy-explores-options-including-a-sale?rc=gtdonx https://www.theinformation.com/articles/digital-trucking-com...

tejohnso 3y ago

Tesla wouldn't exist if Elon had shut down at the 2 month dire point. At least, I recall him saying they were at one point about 2 days away from bankruptcy. Not surprising though, that Elon would be in the same camp as this Convoy CEO, not likely to shed too many tears over worker concerns.

deleted 3y ago
[deleted]
MourYother 3y ago
Everyone at Tesla would be better without the manchild.
shafyy 3y ago
And Elon hasn't been known to exaggerate greatly or lie, so this must be true.
- signatoremo 3y ago
  Who knows if it was two days away from bankruptcy, but Tesla and SpaceX were very close to running out of money in 2008: https://www.businesstoday.in/amp/technology/news/story/elon-musks-christmas-eve-miracle-how-he-saved-tesla-from-bankruptcy-398108-2023-09-12 https://www.businesstoday.in/amp/technology/news/story/elon-... Also where were you during 2017, 2018 period when the doomsayers (aka TESLAQ) predicted the same so often? So much so that this tweet became famous? https://x.com/elonmusk/status/980566116614291456?s=46&t=yN2X3Lb3pCLOqlCC9FRNxg https://x.com/elonmusk/status/980566116614291456?s=46&t=yN2X...
  - shafyy 3y ago
    I don't dispute that they were close to running out of money, but what does "2 days" even mean in that context? It probably means that soon they would have needed to decide when to start the bankrucpty procedues or something.
sokoloff 3y ago

deleted 3y ago

[deleted]

jahewson 3y ago

No a company cannot begin winding up without reaching an agreement with its creditors - the winding up process is a de-facto admission of insolvency and the company needs to declare bankruptcy and the creditors get first dibs on the assets. It’s nothing like a layoff. For example, imagine that you are a supplier to company A and now your contract is both unpaid and cancelled and you’re going to have to lay off some of your own staff. Do you recover the contract money from company A, to give your staff severance? Or can company A stiff you and use it to give their own staff severance? (No, they can’t.)

pc86 3y ago

What about 2 months before that? 2 months earlier still? Another 6? They raised $260M a year ago and it sounds like an extraordinarily capital-intensive business. It's pretty easy to say "oh you should have done this differently" with almost zero actual knowledge of the situation or experience.