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Ask HN: Survivors of "down rounds" – how did it go?
Have you ever worked for a startup that had a down-round?
Did you stick around or did you leave?
How did it turn out?
Any takeaways to share with the class?
Asking for a friend ;-)
- chadash 3y agoI haven't been in this situation, but I think it would really depend on a few factors: - Is my cash compensation adequate? A down-round can make stock grants worth almost zero unless there's a huge rebound. - Are people around me still motivated? I wouldn't want to be surrounded by sad coworkers. - Are the founders still motivated? Their dreams of riches are probably evaporating. And a company with unmotivated leadership is not gonna be around long.
- Shatnerz 3y ago> Is my cash compensation adequate? A down-round can make stock grants worth almost zero unless there's a huge rebound. Most startups fail and options and equity become worthless regardless. In my experience, the biggest changes will be in morale and company culture. There is a chance that the company gets hit by the "Dead Sea Effect", all the talent starts leaving because they can find better opportunities while the lower tier devs stick around.
- rubyissimo 3y agoBe transparent with your boss about how it's affecting you, while also being sensitive that a lot of people are in a similar boat. The journey to liquidity is long. There will be more grants in the future. We had a small down one, eventually company actually did a massive equity re-do for everyone giving us an option for a different strike and longer exercise window. It took 18 months from the "crisis" though. Eventually the board realizes that they need the employees motivated.
- nothercastle 3y agoAnyone actually ever get a big payday off a company that did down rounds? Seems like a non unicorn thing to do