Scammed By A Silicon Valley Startup
medium.com
medium.com
I've never heard of a startup going that far.
You'll be doing someone downstream a huge service. Someone these guys would end up scamming otherwise.
That was 17 real crimes committed. Our society is better off when we collectively do our part to make sure that criminals like that face the justice system.
On the other hand, the right government contact (police? employment? ) will be happy to go after the scammer for "free".
Pro-Bono is usually for criminal defense for folks who can't afford a lawyer and when public defenders aren't available.
Hopefully the perps involved will get plenty of hotbunking time, though.
[0] www.mercurynews.com/crime-courts/ci_24980457/california-prison-overcrowding-governor-asks-court-more-time
[1] http://patch.com/california/gilroy/bp--ab-109-californias-fe...
If this happened in Silicon Valley, the Santa Clara County District Attorney's office has jurisdiction. They have a Major Fraud Unit. "The Major Fraud Unit is responsible for prosecuting cases involving serious and complex fraud, also known as White Collar Crime, where the loss exceeds $100,000. The Unit emphasizes theft cases that are accomplished by lying or the breach of a trusted or fiduciary relationship with the victim as opposed to the taking of property covertly, or by force or fear." Any questions?
The Santa Clara DA's office has a staff of over 500 people. This is one of the things they do. White-collar crime prosecutions often start at the DA's office, rather than coming from police agencies. The DA's office has their own investigators. There's also a process for getting restitution from convicted criminals. This routinely "pierces the corporate veil" and means the criminal is ordered to pay up as part of their punishment.
[1] https://www.sccgov.org/sites/da/prosecution/DistrictAttorney...
True. Of course, in CA, not having posted paydays or not paying on the posted paydays is also a criminal offense.
> California has a large prison system, with cell space available.
Well, given that it only just cleared below the threshold set in the long case over unconstitutional overcrowding, and is still well over 125% of capacity, I don't know that I'd characterize it as having "cell space available".
edit: its back up
This is probably just Tess on her own thinking she's being proactive and in charge of corporate image.
Someone should tell her that accusing someone of extortion without proof is likewise libelous.
Yeah, some real geniuses at work here. No wonder they took it down.
Ignoring whether they were in the right or wrong, they're certainly not handling this very well as a company. If they now re-brand themselves again that would not be a great move if they maintain any link to their former selves. As a start-up I'm sure getting investor finance after a media fiasco like this may be particularly difficult, regardless of a name change.
Posting on FB is the least of their mistakes at this point..
Although there's still time to f* up even worse!
These guys are going to end up seriously scamming some innocent party in the future.
One felony count (anything over $950) is 16 months minimum. I have no idea what the formula is for multiple counts.
I've encountered this myself several times (down to the CEO using hire fast fire fast as a mantra), and judging from my friends' stories, most people have or will. When there are large amounts of money at stake, I guess it makes sense for charlatans and sharks to flock.
There are very few ways to tell accurately from the outset at first who's going to screw you over - I've heard horror stories of the sort from friends at startups backed by high profile entities like YC, famous startups that are often in the media for being "the best places to work at", companies with celebrity founders who have reputations for being "the nicest guys in the world", etc.
It's the kind of thing that you can only learn through a few painful experiences, I think. You do learn your lessons: never pay in advance for anything, don't put your own savings or core livelihood on the line for someone else's dreams, get everything in writing, talk to former employees of a company/colleagues of a founder before getting involved, never ever assume that what you have is anything more than an employer/employee relationship, etc.
I have to say that I'm impressed by how the poster handled it - keeping documentation, filing wage claims, etc. - the only thing she could have done better was not staying on so long when she wasn't getting paid, but it's an understandable mistake when you're in the moment.
I for one am glad I learned my lessons at 22 rather than at 45 with a family to care for and a mortgage to pay. The upside is that there are plenty of genuinely nice, passionate people - when you find them, stay close to them.
That's pretty silly. Plenty of people working in startups never put themselves through that kind of BS.
There are at last two obvious strategies for avoiding the whole problem: (1) be a founder, (2) work in a more established tech company until you have the experience, personal network, and finances to intelligent pick a startup to work for.
When we last talked, he indicated that he was going back to what he did before starting companies. I hope it works well for him, because if he can keep within the (not CEO) role that plays to his strengths; I'd happily work with him again.
One should spend five years building stuff before becoming a CEO.
It's the kind of thing we all already know of because of tv shows like game of thrones. But experiencing and actually handling it is another topic.
If you're doing your job, you know how much money is in the bank and you know what the value proposition of the business is, so the failure modes described in the article don't apply.
I'm not saying a slipper cofounder can't also try to cheat you, but they have a lot less room to maneuver when you're not a subordinate.
So you won't ever be high enough to only deal with harmful people in equally powerful positions. Maybe being the president of the US or the owner of the biggest company can think like that. All other 7 billion people can't.
And there is another vector we also shouldn't forget: The higher you get the higher the stakes. Getting f'd as an intern may mean you lose a few hundred bucks. Being an engineer or mid level manager means you play in the 4-6 digit range. And on officer level or above you play for at least a few hundred thousand dollars and with a lot of possibilities to break laws (or appear to break laws) and go to jail. So you probably won't have more safety, but more risk.
If you really want to be save from these people, go live somewhere in the countryside far away from civilisation, grow your own food, and be nice to the other villagers.
Seen it happen at a company that was voted top xx best places to work for a few years running in the local press.
Pay close attention to how they treat others.
Particularly look at:
1 How they treat their customers
2 How they treat their affiliates
3 How they encourage their affiliates to treat their customers.
Just like you, I'm early on in my career. I appreciate the incredibly valuable and lifelong lessons that I've learned from them. I feel that in the long run I'll be better off for them since I know exactly what to look for to identify bad situations before I'm in them, and how to protect myself if I do end up in one.
Most importantly, I've learned what not to do to other people and find that I've developed stronger ethics as a result.
I'm 42 and at the other end of the scale. To me the line now that "it's a good learning experience" and "I'll know better in the future" are just ways of saying "I'm making mistakes".
From someone who has been there and done that, best not to make the mistakes in the first place. I had strong ethics to begin with and compromised them many times because I thought that's what you had to do to get on. I was wrong.
Learn from listening to experience and watching others fail or succeed, much smarter.
You can never have enough advice before making decisions. Find successful people you trust and listen to them.
Much easier than having to go through your own hassles.
You'll be happier.
But I accept that I will make mistakes throughout my life. When I do, I think about them to figure out why I made the mistake and how I can avoid it next time. Then I let it go- beating myself up doesn't help. Honestly, if I'm going to make a mistake at some point, I'd prefer that it be sooner rather than later.
I'd say I had strong ethics to begin with, and these situations gave me a chance to test (and uphold) them.
It seems like something weird might be going on here - if the founders are willing to forge receipts and lie about the company, it might not be beyond them to hold on to passports or some such for "immigration reasons", which would then explained the unwavering loyalty. If something like that is going on, I hope the devs get out of it unburned.
The biggest indicator I have seen when it comes to H1B1 is if the company is run by recent foreign immigrants.
I have seen 5 man team able to get hold of H1B1 - since they were that dedicated.
The process is not actually that hard if there is a will from the top for it.
The other aspect, is that yes it'll be about $4k to transfer an H1B all in, but... consider the savings. A Level 1 "Computer Programmer" in Santa Clara has a minimum wage of $52k[1]. I'm not too familiar with Santa Clara but that is probably a 50% savings over a typical software engineer wage. Paying $30k for 8 H1B transfers all in looks really attractive when payroll is shrunk by $300k+...
EDIT: looking at some of their linkedin profiles they fit the profile of an F1 OPT employee (Bachelors from an unknown university in china, masters from a large state university STEM degree mill, recently graduated), which is even better for the employer, you get a built in tax benefit discount on their wage.
[0] https://www.uscis.gov/forms/h-and-l-filing-fees-form-i-129-p...
[1] http://www.flcdatacenter.com/OesQuickResults.aspx?code=15-11...
a company, that is not really a company, keeps applying for tons of h1b. they usually have some title like consulting.
they get the h1b and don't even bring the programmers from India. they become "visa holders" companies.
the h1b's then start to look for work on their own, or the holder. and once the programmer is hired, the visa holder company gets paid, take 70% (or 60% if the programmer found the position themselves).
and this is how most h1b contractors that work on Google and such live. they will endure it for the 10 years the us forces them to stay as h1b. always trying to get transferred to the hiring company directly, and almost always failing.
the final company pays much more for a contractor via a visa holder, but they have the benefit of paying it via a small consulting company, so it won't show up as head count for the investors. everyone but the programmer wins.
This is how you attract the best and the brightest and this is what america needs.
That's exactly right. It has always costs every company I have been with more to hire an H-1 than a local person so we have only done it if we can't get anyone local -- which is exactly the way the system is supposed to work, and that intended system seems perfectly fair to me.
These scammers fuck it up for the rest of us.
they can endure such jobs only for 6yrs, beyond which the company that sponsored the visa has to file for a green card (if they do, then the employee can continue suffering for a few more years).If they dont file for a GC, then its a one way ticket back to their home country (or go to Canada with a PR ready).
the 70-30 split, is something I used to fume about, thinking its unfair to the employee etc. But that is how contracting companies work (not just for H1b employers). They pay the employee $.7X, and charge the client $X for every hr worked.
the benefit for the final company is that the headcount of H1b employees on paper remains low, and the cost of H1b kinda gets prorated into the hourly rate. It doesn't make sense to hire an H1b if the company knows for sure that they need her for just one/six months or a year. But a staffing consultancy can certainly justify filing for the H1b, if the same employee can work with 3 clients for 1 year each.
Though this looks like they (the companies filing for H1b visa) are doing something illegal, it is not, as long as a LCA (Labor Condition Application) is filed for the client's location and is approved, its totally kosher with USCIS, DHS and DoL.
Sadly, its hell for those on such H1bs (and I'm glad to never have worked with such consultancies)
the problem exists with those h1b consulting companies, that fudge resumes, fake phone interviews to get someone with zero knowledge into a job with a client. Those are the companies that are poisoning the well and making it tough for people like us and employers like mine, who are using the H1b option the way it is meant to be. In fact, its worse for those who who studied in US, and worked with an employer for ~2 years on Optional Practical Training (work auth while on student visa after graduation), lose out on H1b lottery because it was oversubscribed by such fraudsters. Its not just the employee losing out, even the company that invested in that employee is losing out.
Once, I interviewed a senior engineer to join my team and it was shocking for me to come across a resume that was as experienced as I was, but had zero knowledge. Later did some prodding on the candidate's past experience, realized its a fake resume with fake experience.
I can only pity those h1b employees at this scamming company. The sad H1b rules, that tie them to the sponsoring employer, is the reason such practices exist.
That's a failing consulting company. A profitable consulting company needs to bill at 3x to 5x wages to support the overhead of sales and management. Even an individual, with no overhead but themselves, needs to bill at 2x what their desired wage would be if full-time.
plus (at least from an indian perspective) there was a time when the indian job market for programmers was so bad that people would put up with all sorts of abusive conditions, simply because they knew that if they went back home it would be to a long and depressing job search that would likely end up with a low-paying position. (i believe that has gotten better in recent years; i'm not sure what the situation in china is)
https://en.wikipedia.org/wiki/Cluster_B_personality_disorder...
For some reason we are not educated about this. We learn it the hard way by being taken in with what seems a good opportunity, then getting abused and then going our own way. We naively believe people empathise for others in the mistaken idea that there is some semblance of 'compassion' in everyone.
Even if we have gone through the mill several times we may not be educated as to what is only going on. You have to be done over by someone at the extreme end of the spectrum of personality disorder to understand what really goes on with the tyrants and bullies that frequently own companies, start-up or otherwise. We even elect these 'personality disorder' types to high office without anyone pointing out that they are not fit for the role due to having these psychopath tendencies.
This really does have to be a regulatory issue as those that cannot think through the consequences of their actions or empathise with others or understand the harm they do need to be rendered powerless. Otherwise they will not learn their lesson and go on to waste yet more lives. They can do so near indefinitely, taking people on a ride for six months or more before their victims cotton on to what is happening.
There is a second problem in that the people with these personality disorders really do attract others. Cult leaders do it, to attract others with personality problems of their own, elsewhere on the spectrum. For instance, in this case, marketing. What type of person does marketing in the first place? What leads them to believe they have the secret sauce to market the product they know nothing about? There is some self-belief going on there, some belief that isn't grounded in a strong product that the customer-base will 'market' using word-of-mouth. Sure there may be some good experience and education that can be brought to the problem but often there is not.
It is important to learn the 'tells' - as other commentators have noted it is how people treat restaurant staff that says it all with these rogues. Also the 'there is no I in team' really does matter - do they say 'we' or 'I'? Sometimes we overlook these 'tells' for reasons we invent - maybe they have were brought up that way... We give them excuses for their behaviour. We keep our anger at them to ourselves and don't burn our own bridges by letting that anger out.
It is a pity that most people only get 'lightly burned' in these situations and not fully toasted. Only when you get fully toasted can you work it out properly and end up knowing about the rogue personality types and how toxic they are.
obviously, there are personality traits and disorders which predispose a person to doing bad things. But that isn't a reason to assume that's what happened here, unless you happen to be that person's licensed psychiatrist.
It doesn't take a mental disorder to be shitty.
As for me I am entirely unsurprised because I've literally seen it all. and it happens more often than most people realize. the more desperate you are to be here, the more people will take advantage of you.
It's very similar to the way young girls who want to be actresses or models get "discovered" by pornographers.
She never received any paystubs and the company was late on payroll as of before she was hired
I have never, ever been paid without either a paystub (as an employee) or generating an invoice which the business then paid (as a freelancer). The outright refusal to share how they arrived at the figure on her cashier's cheque should have sent her looking for a new job in the Bay Area or back to Texas.
The real lesson from this story is to always have a backup plan when making a big move: what do you do if you arrive and there is no job/no money? what do you do if you arrive and there is no apartment/room/house/etc.? Scammers exist and there is only so much you can do from a distance to avoid them.
He got paid - that's what matters.
The paystub is a minor thing/
Seriously, though, ADP delivers paystubs. If they were using ADP, they would have gotten paystubs.
You can invoice the company. It's not a big deal.
Again - of all flags - lack of pay stubs is the least of them if it's just a garage startup with 3-ish people.
The actual exchange of money is 100x a stronger indicator of health than the presence of a stub.
That is not "a garage startup with 3-ish people."
Nonononono. You're hired as an employee. There is a legal and ethical agreement for them to pay you at the intervals agreed upon in your contract. There are no ifs or buts about it, no invoicing them, no excuses for 'just started'. Payroll is NOT hard.
No - you are completely wrong.
There is absolutely nothing wrong - or even remotely immoral - about paying using invoicing while a company gets going. It's common and normal.
And payroll is not easy - it's a huge mess - and it can be very complicated.
If a founder, with funding, told me: "Invoice us for the first two months until October when we are up with payroll" I would have no problem with that so long as I was getting paid.
Again - of all things, it's not the issue.
The non-payment, the lies about funding, the loans from staff, and all the rest were bad signals.
What's odd is how nobody seemed to have anything to say about the product itself ...
If my contract says I'll be paid monthly on the 15th, when do I send in the invoice? Are the payment terms net-10, net-30, or longer?
Do I need to break out sick or vacation days as its own line item? What about the deductions?
Who is responsible for figuring out and paying the payroll tax? Because it sounds like asking for an invoice is a way for the company to avoid paying unemployment tax, social security, etc. That in itself would be a red flag.
If the invoice is not paid, can I file it as a wage claim or do I use some other mechanism?
These are the obvious questions. If as you say it a common and normal practice, there must be some place which describes the basic details.
If payroll is hard for a company, why is it any easier for the employee to figure out these payroll details?
I send in the invoice? Are the payment terms net-10, net-30, or longer?
Do I need to break out sick or vacation days as its own line item? What about the deductions?"
If you are having difficulty grasping this - you should not work for an early stage startup that is pre-funding. You are expecting very standard 'employeeship'.
If you are an 'employee' of the company - yes - you are required to be paid with W2's etc. - of course.
But if you're not obligated to be an employee of a company to accept equity - or other kinds of payment for services rendered.
As far as 'invoicing' - either you're being sarcastic or you've never done such a thing. You send an invoice, and you get paid. You have to claim it yourself in terms of taxation. As far as 'terms' - I'm hoping you are kidding. Either you get paid or you don't.
The company in this article I think was well past the time wherein they should have had had payroll set up - no doubt about it.
At the same time - it's absurd how confused many of you seem to be about the simple mechanics of getting paid.
You do not need a payroll system (i.e. W2s) while you are in the most early stages of a company.
You should really talk to an HR/tax attorney before you continue to spread misinformation.
There is no special exception for startups where employee salaries are exempt from payroll taxes. It is also illegal for a company to pay you as a contractor when you are really an employee. What you propose sounds exactly like breaking the law.
Also, a company which proposes this arrangement takes on the liability that the 1099 contractor could come back in the future and sue for the taxes and benefits that a W2 employee would have received. That happened to Microsoft a few years ago.
I was giving you a chance to demonstrate that this practice is common and that you know what you are talking about.
However, given your posting history I should have expected continued blustering where you demean others for lack of knowledge. Why, just the other day you said that I, spouse of an Army vet who did two tours in Iraq, didn't have exposure to family members in the military. Now you say that I, employee of two startups and founder of two more, have no startup experience.
No one in this thread says a startup company needs a payroll system. The question is about paystubs for employees, which the employer can even do by hand.
The fact, for a number of different states in which I've employed people (including MA, CA, NH...) is that there are very specific requirements for hiring people, and
NO, YOU CANNOT SIMPLY "pay using invoicing while a company gets going".
Federal and state laws specify that all employees are W2 status, and you are REQUIRED to withhold taxes. Management is even personally on the hook for these tax liabilities.
There are exceptions under certain limited criteria in which you can hire people as outside contractors -- commonly referred to as "1099s" -- the Federal laws are quite tight (the famous '20 questions'), and state laws are even tighter. E.g., in MA you cannot hire any person who performs core functions of your company as a 1099, so if your company writes software you cannot hire anyone to work on that software as a 1099 (but you could hire someone to, say, customize your office accounting package as long as you are only using it). Yes, it is that tight.
Just because some founders decide to break the law, and you would be happy to go along with them, does not make it legal.
If you are an employee, the company is required by law to withhold taxes and pay you regularly. Every state in the U.S. has an agency that will take and prosecute wage claims. People have gone to jail for messing with witholding taxes.
If you just invoice, you are effectively an independant contract, they might not pay you, and you are on the hook for paying your taxes. A big difference.
It astonishes me that anyone could be so ignorant as to say there is nothing wrong with making people invoice you. As you've correctly stated, it's a completely different relationship. Even the liability is different.
If you're a contractor and the guy who signs your checks says "nice ass! Now shut up and do your work" He's pretty much just pissed you off and as a self-employed contractor, you're free to decline and move on to another "client". If that same person is your employer, he's broken several civil laws and in most jurisdictions, committed an actual crime.
We could both go on for hours on the differences which is why this whole thing amazes me.
Employees cannot invoice their earnings, they must be paid according to the law and the employment agreement you signed with them.
Yes payroll is complex but this is exactly why it needs to be done correctly and timely. The earnings, taxes, insurance, and other liabilities must match up along with all the reporting requirements. There is no way around this. You cannot just skip the complexity by telling them to invoice you.
Real companies with people running them who want to do things on the up and up and who know how to run a successful company want to keep a paper trail of every dollar going in or out the door. This includes having a pay sub with every single paycheck or invoice paid that shows what was paid, how much was paid, why it was paid, and when it was paid. That's How to Business 101.
Most of you it seems have never run a business, have never consulted, have never invoiced for anything.
--> You don't need a W2 to pay someone legally
--> You don't need a 'pay stub' to have perfectly organized and legal books.
Any good entrepreneur knows that if you don't know where every cent of your VC money is going, you're going to get eaten alive at your next investor meeting or VC round. On the other hand, if you can pull out a spreadsheet that says "We spent exactly xx% of our previous round on payroll, xx% on rent and utilities, xx% on chinese food, etc." you're going to have a much easier time convincing investors that you're a business that knows what the hell they're doing.
Not having decent bookkeeping can't be chalked up to "fast-moving startup woes", it's just irresponsible, and there's no excuse for not being on top of it.
There is absolutely no excuse for not doing this. None.
Its not the least, though it may be less than just being late on payroll. Posted paydays, of a certain minimum frequency, and timely payment on those paydays is a bare minimum legal requirement in most jurisdictions for which there are generally fairly significant liabilities that attach for failure. [0] A business that fails this in any broad way (for lots of employees and/or for multiple pay periods) is seriously and fundamentally broken.
(OTOH, tax withholding and lots of the other things that go on paystubs are similar bare minimum legal requirements with significant liabilities for failures, and if you are doing them correctly in the first place, actually providing paystubs is trivial -- the hard part is doing the required things that end up getting reflected on paystubs. So missing paystubs is at least nearly as big of a red flag as late payroll.)
[0] In California, for instance, failure to either post paydays meeting the legal requirements or to pay on those posted paydays as required by law is a crime (misdemeanor) by the employer. http://www.dir.ca.gov/dlse/faq_paydays.htm
Accurate payroll costs somewhere between $50-100 per month per employee with dozens of great vendors available. This is an incredibly trivial cost (especially compared to the fines for breaking these laws) and means there's no excuse to not have things in order. If you can afford a salary, you can afford accurate payroll and bookkeeping - otherwise you have no business being in business.
Again - I would suggest that maybe you have never started a company or done payroll, or paid anyone yourself.
It is not required to have 'payroll' to pay individuals for services rendered, nor have properly managed books.
I once created a 'side company' to manage some IP. The company had no employees. All participants (there were five of us over time, but only three at any given time) - were paid as consultants. Two of us had equity.
This arrangement was far superior than having payroll for this particular situation.
It is, however, illegal to pay employees like contractors. When you are hired to work full time for a start up you almost always meet the test of being an employee. The author of this article did. It IS therefore illegal to not give her a paystub or ask her to invoice.
This is generalizable to start ups. I've worked for start ups. Every time I was hired as an employee and treated as one. It would have been a red flag and illegal for them not to pay me as an employee.
Again, everything you're saying for the most part is true if you're talking about paying IC's. Where you are demonstrably wrong is assuming that you can treat start up employees as ICs You can't. Therefore doing what you're claiming is "normal" is actually illegal on many levels.
If you're talking about instances where you use contractors instead, then that's an entirely different scenario.
As long as you treat employees and contractors separately and properly, there are no issues - but having employees and paying them like contractors is illegal. Invoicing is not a replacement for payroll.
I would suggest that your little side gig did not provide you panoptic insight.
The correct (and only non-criminal) order of operations is (1) figure this out, (2) start hiring employees.
If you can't calculate withholdings and all those other things that get listed on a paystub correctly (which is the only thing that would stop you from generating a paystub), you are breaking the law (civilly and perhaps criminally under federal and state tax and other laws, that require the withholdings, deductions, etc.)
If you don't (in California, where this occurred) have posted paydays with at least the legally specified frequency, or don't pay employees on those paydays, you are breaking the law (criminally, under state employment laws, as well as possibly civilly.)
So, if you haven't figured this out, you have no business hiring employees.
This is false.
For any of you interested - here is the actual law in California:
http://www.dir.ca.gov/dlse/faq_independentcontractor.htm
It's perfectly normal and very common to submit invoices for services rendered that you claim on your 1099.
There's no way you could have run a business without grasping how common paying people via invoicing is.
Some major companies - such as Wordpress - tend not to hire people for a while. For the first little while, they have you work on 'projects', remotely, until they decide they want to bring you on long term. The founder indicated that they pay them for the work and only bring some of them on. Obviously, they are getting paid via invoicing.
Startups will often bring someone on for a project/consulting, and then decided to keep them full time. This is not uncommon. It's also happened to me.
I'm going to guess that most of you commenting have actually never run a business, paid an invoice, or submitted and invoice.
It's quite legal to hire people to serve in roles that are not, under the tax code, employees but independent contractors, without being able to handle payroll. But that's not a status that a company can freely choose independent of the nature of the work, it's a status that is controlled by the nature of the work by rules set out in the tax code.
You seem to think that employees hired as employees can elect invoicing and 1099 status if the company isn't up to handling employment law requirements, order that the company can hire people as employees and then treat them as contractors until it is ready to handle employment law requirements. Neither is the case, and either is a situation in which the company violates many aspects of the law (and more if it doesn't pay timely on a regular schedule but instead waits for invoices.)
fyi, as alluded to elsewhere in this thread, the government deems payroll taxes to be paid by the employee on the date he or she receives his or her share of the paycheck. At that point, the business is holding the taxes on behalf of the government. Officers of the company are regularly held personally liable for unpaid payroll taxes. The irs and state tax agencies choose a "fuck you, pay me" approach to these taxes. You should probably not screw about with them, but to each his own...
Your posts in this thread are the most egregiously wrong I have seen on HN in recent times.
Contractors never get Paystubs
and yes there it is a HUGE red flag (and likely illegal) for a EMPLOYEE to invoice a company for their wages.
What are you talking about?
Invoicing your startup for a payment is perfectly normal, and has nothing to do with 'offloading the risks of making payroll'.
Again - getting paid without a pay stub is utterly irrelevant to a new startup.
What matters is getting paid and hopefully it's done in an above the board manner, but the transfer of money is the primary indicator of risk - not the pay stub.
There is absolutely nothing wrong with not using payroll services for the first little while while a startup gets going, and it has nothing to do with the ability of an entity to pay you.
If you are getting paid consistently - through invoicing or whatever means, this is a good signal.
By the way - although the story is pretty scary (and hilarious) - the author is also a little bit naive. Everyone involved seems to be a little inexperienced.
The contract you sign is only as valid as the parties backing it up! Just because someone gives you a 'piece of paper' that may be legally binding, does not mean it has any integrity. The author should have done a basic bit of homework or point blank asked some very basic questions about funding status. He joined a company 'assuming' there was a round of funding, but that turned out to not be true. From my reading of the article, it doesn't seem as though the founder lied, but rather mislead the author. A few simple questions such as: "who has backed you, for how much" - or even a check on Crunchbase would have sufficed.
Again - a contract is only has the amount of real integrity as the people signing it. Your ability to enforce it is not just a matter of law - it's a matter of the reality of the entities ability to do so.
Anyhow, I'm glad it was written up so that people can learn form it.
But that's not what happened, because they were late, enough so that people were filing their rent late. How about -- "Startup or not, don't take your employees for 'free credit'"?
Or, more brief: "Fake it till you make it, but don't break the flippin' law".
Just don't fake it. Don't fake anything. Don't sell products that don't exist. Don't lie to your employees about your financial state (I see this happen a lot because people are ashamed to admit that the company is having troubles... this is a bad strategy). Don't lie about the state of the product (something that happens when people are naive enough to not realize how much testing is needed.)
Paystubs don't need to come from ADP. They can be typed up or even hand-written if you want. But they demonstrate, and record, that the company is fulfilling its legal obligations as an employer, and give the employee the information the employee needs to fulfill their legal obligations as a taxpayer.
You are NOT entitled to people working for you for free, under deceptive pretenses.
If you're in "this may fail at any time" mode you can pay people 1099 as contractors.
going from w2 with pay stubs to no pay stubs means they're out of money and saving as much as they can be not paying payroll tax.
But what if they just give me a hand written check for $70 made out to me, Joe Blow. There is no indication of taxes being taken out, but hey, I got $70, so all is great right? Wrong..
At the end of the year I get a W-9. They say I wasn't an employee but a contractor. I have no proof that they took out taxes and now suddenly I am on the hook to pay taxes to the government that were already taken out by the crappy employer and pocketed.
See the problem now?
I've always been paid, however I now check to see if startups have actually filed the SEC paperwork when they claim to have raised a round, and verify with the investors they claim to have backing from that they've actually invested in the company. One startup I worked for lead the employees to believe we had a solid 18 month runway, when in fact the founders were covering payroll from home equity lines of credit. They didn't actually close the round until a year after most of the initial employees left as payroll became erratic.
Another startup I worked for on the basis of a handshake...never do that. After a year of developing the company's MVP the founder formalized the structure and equity of the company, cutting the four early employees out as co–founders and reducing our equity from 2% to 0.5%. As were were all working on handshakes, none of us had legally committed to working for him, so we all walked away. He lost the MVP since I had the only copy.
The last startup I worked for (and will ever work for), I was recruited by the CEO to come in and build a mixed-discipline technical team in a supporting role. Within a month it became fairly clear that I'd been hired over the objections of pretty much the entire management team, which had I known I wouldn't have taken the role. I was clearly pegged as "a bad hire" which would not have happened had anyone I'd interviewed with spoke up.
Throwaway account…
I'm curious, how would you go about doing this?
For example, you can see the amount of money FullContact raised in 2015 here: https://www.sec.gov/Archives/edgar/data/1523064/000152306415...
I used to get annoyed at all of the chest-beating press releases about how much money a company had raised until I realized it was a form of external validation. None of the companies which burned me on equity/funding issues wanted to talk publicly about their fundraising rounds, it was always "we're going to a do a press release, it's just not the right time now". If you publicly state "We raise a $2.5MM Series A from the following investors" I can go out and verify that.
Bonus story: a "company" recruited me hard to be their CTO. Some wining and dining. But a lot of handwaving about the business model and where the funding was sourced from. The founders wanted me to bring their "vision" of social e-commerce to market utilising a proprietary algorithm which would be disclosed to me only upon taking the role. When pressed about corporate structure and funding they eventually disclosed that funding was coming in the form of personal checks written to cover bills as they came in, by the domestic partner of one of the founders. No C Corp, not even an LLC. I declined.
> WrkRiot pulls signals from your resume and matches them to job posts. That's right, we do the searching for you. We'll be updating this section with videos, walk thru's and more.
"walk thru's"? This website looks like garbage
Guess employees are the target audience for this post.
Replace employees with robots and write a blog post: HOW WE WORK 24x7
(not trolling, I'm serious)
Second thought: this is a company which can't even manage to register "workriot.com". Even if "WrkRiot" is the brand, I would expect them to grab the domain with the more obvious spelling and have it redirect to wrkriot, but it turns out "workriot.com" is registered to a Finnish hosting provider sitting on the domain. So to recap: the domain with the more obvious alternate spelling of the company is (very likely) up for sale but they still haven't managed to acquire it. That does not engender much confidence in their marketing or management.
Yes, I think I would pass on this venture.
It's actually dangerously obvious who some of the people mentioned in the story are, just from the descriptions. It might be a good idea to anonymize characters further by changing ethnicity/nationality and gender.
WrkRiot seems to be the company in question and their online presence is so laughable nobody here likely feels bad for making fun of them, especially because of the behaviour the author describes. But the story is not just about a company but also about individuals.
Consider WrkRiot's head of marketing, for example. The author portrays her very negatively (outright trying to take the author's credit, being generally incompetent and engaging in deceptive and hostile practices). Whether you personally find the author trustworthy or not, if you only go by the article this is essentially hearsay.
Whether the allegations are true or not, she might face problems because of them (e.g. when trying to apply to new jobs). The author OTOH can maintain plausible deniability because the article never explicitly named any names (just gave enough identifying information to allow HNers to deduct the identity of the company and the employees).
I'm not saying the author is lying. I'm not saying WrkRiot or its CEO is innocent. I'm just saying there's no way to know as an outside how much of the story is true and what details have been left out (knowingly or not).
This is why in criminal investigations "due process" is a thing. Otherwise you end up with mob rule and character assassination -- and accusations tend to stick even if they're proven wrong and malicious.
If you are a victim of medical malpractice, the district attorney will not find healing for you. If someone wrongfully injures you, a criminal case will not return even an inch of your wholesomeness. If someone cheats or robs you of $50k, the district attorney will not help you pay your bills.
Civil court is the provided forum for issues of individual justice, and there individuals will find themselves paying alone, and in a position of imbalance, only a stupid person would fight for themselves. In the game of civil justice, where one might seek healing or remedy, you must pay for the prerogative to play.
That said, of course there are safe conclusions to draw from this story (especially the ones that hold true in general) but all personal accusations should always be taken with a grain of salt, especially if you have no personal knowledge of any of the people involved.
This is not entirely true. While the general civil/criminal purpose distinction you make is broadly correct, there are provisions for "restitution" within the criminal court system that overlap substantially with the compensatory function of the civil court system, so its not accurate to say that the DA will not help you recover funds or that a criminal case will not restore your losses.
See, e.g., http://www.cdcr.ca.gov/victim_services/docs/restitution_guid...
Just because it's "hearsay" in the sense that it's only one person's account doesn't mean one should have to anonymize everything.
That said, Penny's account of life at the mystery startup sounds startlingly like that of my experience at Motionloft many years ago. The difference there is that the (ex-)CEO was convicted, and my experience was corroborated by another ex-employee and by one extremely pissed off vendor.
Domain Name: WRKRIOT.COM
Creation Date: 25-aug-2016
Registrant Name: ISAAC CHOI
Registrant Organization: 1FOR.ONE CORPORATION
Registrant Street: 2005 DE LA CRUZ BLVD
Registrant Street: SUITE 131
Registrant City: SANTA CLARA
Registrant State/Province: CA
Registrant Postal Code: 95050
Registrant Country: US
Registrant Phone: +1.4083447484
Registrant Email: MYSUBS@HALLFORONE.COMYou have generated more traffic to their site than Jess ever will.
You are not alone in your experiences.
You are obviously a great professional and you will probably do well.
You have shamed the company into probable closure (which is a good thing) as the guy would get worse with more money and bigger teams.
For everyone involved in a startup there are huge risks. Most of the risks are borne by the founders, they get handsomely rewarded if things go well.
But they often don't. I wish the startup community would take heed at this great story and be more honest about the risks, instead of following the hype train.
Macho ego bullshit is to blame for a lot of wasted effort.
But it's really good to hear that you are back with your cat.
People in-the-know know what company and people are being discussed in these posts. Accordingly, "I know privileged information." banter is thrown around.
I wish that, for the sake of those outside the loop (me at least), people either name-names or take the wink-nods to a private message.
This is probably going to be a very unpopular (ie: negative karma) rant, but those of us outside the SV echo-chamber get hit by this all the time.
> People in-the-know know what company and people are
> being discussed in these posts.
> I wish that, for the sake of those outside the loop (me
> at least),
If the SV echo chamber extends to Texas, you might be right about the club.
She's just being careful! If she has brought the company down by explaining her position she may get in all sorts of trouble by naming them too.
Lawyers would love to take her down if there's been a lot of money creamed. He'll probably use this HN thread to blame her for his company failure.
Usually low-income workers, many of whom are not in a social class where they're friends with a smart lawyer, are the victims.
This is just the SV flavor of what millions of American workers suffer from year-round.
After our boss departed, I took over a few of his duties. One of them was “viral marketer.” I was now creating ad campaigns on Facebook in an attempt to bring monthly active users to the site.
I had no training. I was acting on one hunch and instinct after another. Yet, I was good.
A month or two passed without incident, and then we lost a team member. Unable to withstand the workload and the move, she left to be with her boyfriend. We all made fun of her for it."
Seems like the "other side of the story" from Tess. Doesn't make her look any better...
http://theunderemployedlife.com/working-start-almost-killed-...
"A real start up company is populated by a shark tank full of thieves, corrupt business people, unscrupulous investors, and fickle employees" WTF? So you're not a 'real start up' unless you've got a bunch of corrupt criminals running the show?
Best visit with noscript enabled.
I've turned off the phone for now, and it's not 6.0, rather it's 6.x (up to date with August 2016 patches IIRC), not sure if that makes a difference. I'm mostly worried about the malware being a drive-by download/infection.
I had to resort to a factory wipe to clean it; it was not a great deal since it was a phone I'd literally today just taken out the box, but if it had been something I had data on and used for a while, it would have been a serious PITA.
I suspect the ad network malware pumper saw the visit spike and decided the traffic volume warranted an exploit delivery instead of their usual junk ad content.
> We worked through Christmas, and were given no time off for the holidays. Our boss, being a kind soul, offered us New Year’s Eve as a consolation.
AFAICT, Christmas hasn't come yet.
I hope you guys continue to expose fraudulent startups and CEOs like this. It really is a service to us all.
It seems crazy to me now that I wound up in such a situation, but what it is happening to you, it is usually accompanied by a healthy helping of lies, misinformation and hope.
It wont happen again. But it was fun getting ~3 months salary in cash and going to Jordan's to buy furniture with my girlfriend like a gangsta'
Fo' shizzle, if I'm ever gonna buy a nailgun, it's gonna be paid in cash.
But I've to say I'm shocked something like that happens even in Silicon Valley, and based on other comments here, quite often too. I don't know whether to cry for my fellow shaftees or laugh at them out of cynical schadenfreude. All I can ask is please do something to fix it effectively, because the broken window effect only makes things worse with time.
Definite bonus points for the fake wire transfer receipts though. Above and beyond!
Is there any bank or payroll company that offers a wage escrow service? As in, the company pays X months of wages in advance into a per-employee escrow account that's FDIC insured, and the employee can log in at any time to verify its balance.
>“Therefore, in what we believe is an unprecedented move, Target Corp. is voluntarily seeking to establish a trust that we will fund with C$70 million. Those funds are designed to provide nearly all Target Canada employees with a minimum of 16 weeks of wages and benefits coverage during the wind-down period.”
http://www.huffingtonpost.ca/2015/01/27/target-canada-severa...
I'd imagine less so for tech startups, since in their early life most of their money comes in big chunks of funding, but for a lot of smaller businesses that are self profitable (restaurants come to mind), they can't afford to keep wages in escrow, because that's money they'd have to borrow.
Assuming the writer is as scrupulously honest as they seem to be, how legally exposed would they be in actually naming names? And assuming they are exposed, are astute commenters who use clues from the article to reveal the company also liable?
It seems to me that it would be a HUGE public good to name the names. Employees and investors absolutely need the right to know about the people doing this; being able to safely expose them would go a long way to stopping such scum.
Not everyone has $50k and the time to fight a libel/defamation suit.
No, but that's part of what would be at issue in a lawsuit.
This seems to avoid the defamation issue because it is a personal statement (about yourself / your thoughts) instead of a statement about them. They could still sue you for defamation, but hopefully you could get it thrown out early at a low cost?
Anyone involved who wanted to claim that the negative portrayals (of which there are plenty) were false and caused economic harm -- both individuals and the company as a company -- could file libel claims for the damages caused. Even if no liability was actually found in the end, the cost of fighting the lawsuits could be significant.
> And assuming they are exposed, are astute commenters who use clues from the article to reveal the company also liable?
Its harder to see liability there, though its not impossible that someone could try to make a case.
The second place, the C level executives literally didn't know how to calculate runway and more or less ignored the bank accounts. Checks started to bounce from the bank accounts two days before the payroll was to be cashed. The executives freaked out and honestly felt horrible. Payroll bounced but we warned all of the employees. I was again development manager and the CEO asked me if I knew anyone who could help. We brought in a friend of mine who is a consulting turn around expert. We got one of the existing investors to make payroll, three days late, by signing a personal check. My friend, the turn around expert, wrangled the books (after not sleeping for numerous days to try to figure out the financial situation). We turned the company around, and in a few months had it to a level of profitability it had never seen before.
It is possible to turn things around. Really the biggest problems come when people aren't honest with themselves and their employees about the situation they are in. The first CEO in my example had to be honest with himself and realize he had to spend on his employees before he could spend on his family. When he relinquished control of the financial decisions and stuck to what he was good at, the company turned around quickly. The second executive team had to realize that they were young and inexperienced and needed help. When they did and asked for it, the company turned around quickly.
This lead to a number of interesting situations. He did make payroll the next Monday (he literally sold everything he had, went to his elderly parents and begged them for some, and made it happen. Someone had to drive him into work on Monday because he sold his cars). A good percentage of the employees left that day and never returned. Some of us stayed, believing in the business, his honesty and integrity. I was just an engineer but we did turn it around and actually he had some great plans on how to never get into that situation again. He actually did very well after the 08'-09' market downturn and his business is still very profitable to this day.
The things that stick out to me here are how excellent teams took the mantle and provided radical turn arounds from a trajectory pointing to failure.
Honestly made my day.
I know what a lot of people will say to that. "No way, you're just an employee, you won't be treated like an investor." Well, true, if you have that attitude you won't be treated like an investor. You'll be treated like an employee. However, if you start acting like an investor, you'll be treated as one. Ask intelligent questions about the business and its financials. Talk to the board. Give intelligent and thoughtful advise to help the company. Be an asset far above the code you write.
If you do that, and then all of the sudden everything starts to nosedive, you will be in a position to help fix the problem and reap the rewards. You are an investor, not an employee.
But that was a case of a CEO who was honest with the employees about the state of the company; I don't know of any cases where a company succeeded after a CEO lied about failing to make payroll.
just to be clear, the company was not worthless. we were actually somewhat breakeven at that point, monthly revenue was around $15k and employee salaries were somewhere around $15-16k. the idea at the time was that if they accepted stock compensation instead of cash, the company could theoretically afford to hire more developers, or launch a more ambitious marketing campaign. i did not factor in the fact that these employees weren't invested in the company, and to them, the fact that we weren't making millions in revenue means we are broke. so they value the stock at zero.
just to conclude the story: i ended up selling my company to another large company for a small profit (not headline-making numbers), enough that i can live comfortably and continue pursuing entrepreneurship dreams while not being employed. the employees who would have received stock back when i offered it would have made a profit, although in all honesty it's not Google or Facebook money. just for fun, i did a quick calculation on how much one of the employees who refused the offer would have made in stock - it was roughly about $250,000 worth.
i walked away with a smile, and that dude kind of just shrugged and walked away.
"According to Business Insider, Pandora co-founder Tim Westergren admitted at a San Francisco startup conference that, between 2002 and 2004, it didn't pay its 50 employees at all. "
I really feel bad for those workers. Essentially they are obeying coding slaves for the company until they eventually get their green card. They can not risk being fired, they will not ask for a raise, they can not easily switch to another job etc. etc.
A native worker like the author is less likely to put up with this kind of BS for very long.
This is unfair for both the foreign workers and native workers. Cases like this really show that the H-1B system is a total joke.
H1B application (lottery this days) is at the beginning of April, H1Bs granted visas won't be effective until October of the same year. Most of the JobSonic devs started in the end of 2015, therefore they are not H1B visa holders, JobSonic 'probably'(I hope) applied for their H1B visa because they have been students in the U.S. they have more chances of winning the H1B lottery. If the won the lottery, their visas won't be valid until October 2016.
There is a quota of 60k H1B per year, and extra 20k for students in U.S. Universities.
Edit: So their H1B application (Oct 2016) depends on JobSonic well being, that's why they are not asking about getting paid, because their H1B visas are not valid yet.
As we talked, the CEO stated he is putting in $2M to fund the startup in November. In December, with $400k or so in the company with the rest coming, we started to build. We grew steadily till about April with a prototype. At which point, the CEO kept mentioning money was coming and with a few different reasons on why it did not arrive.
I bridged May and June. As the stories piled up, I started to ask more pointed questions. I met Bernie, the lawyer who was real. Bernie has an office with Montgomery McCracken in NYC. I insisted the CEO to fly twice to NYC to meet with Bernie and resolve the funding issue. On the last trip, he claimed he got a $500k loan from his lawyer, Bernie, and his cousin, Tommy. The last payroll with ADP was made.
I did not find out till the beginning of August that the money for the last payroll came from one of the employees. I thought there was $500k available starting July. It became apparent it was not available shortly thereafter.
In July, Penny joined. We went through more stress at the company with the CEO stating every other week money was coming from a variety of sources – a line of credit from Mackie Research due to his personal connections, his money making it over, and different investors. None of it came to pass.
In August, I thought it better to let some of developers go as there was no funds to pay them and ask the other ones not to come to work until money is in the bank. An investor did come in that allowed us to make July’s payroll a month late.
I did not see any of the wire transfer confirmations till later as I was showed by a couple of the employees. I did not get a confirmation personally. The team was paid for that wire transfer (July).
In August, I tried to validate his story with his brother in law with no success. I was not able to corroborate any of his story after contacting his educational institution and prior institutional employer. This lack of trust came to a head a week ago and we parted ways.
The current story from the CEO right now is that the team will get paid for August on Monday to Wednesday this week. I have no idea if it is true.
To this day, I don’t understand the game plan from the CEO. Why accelerate into a brick wall? None of it makes sense.
I am currently out the bridge, expenses, August office rent and back pay.
It never occurred to me, till too late, that somebody would misrepresent so much of his story. For being naïve and believing in the dream, I am truly sorry.
I think one bit from Penny's article is particularly spot-on, and I've experienced it first-hand, as I'm sure many of us have: "Some may question why I took the job in the first place or continued to work for them when there were so many red flags. To those people I say this: there is also a default human condition to not give up."
Shame that some people prey on that human condition.
How much equity were you able to hang on to when you left? (Not that it will probably ever be worth anything :/)
Chances are VERY high he kept your $200k. He will be the only one on that burning plane ride with a financial parachute....
I suggest suing him or threatening criminal charges. he might magically find the lost payroll money and reimburse you....poor h-1b visa dudes will get jack shit.
There's not much to do for finance when the bank account is empty and your CEO says there will be more money there tomorrow for awhile. I bridged for a bit and then stopped when I could no longer believe him.
Kim (the writer) is a korean last name, is the company CEO korean too?
The H1B's are Chinese and probably have no influence over how the Korean clique runs their company. The quote from "Michael" suggests that he has little more than contempt for the "Chinese kids". I can almost hear the Korean version of that remark in my head, and unfortunately this kind of racism is all too common among the assholes who give my country a bad rep.
WrkRiot is considering legal action against a disgruntled former employee who has launched a slanderous campaign against WrkRiot and some of its employees via social media. While it is not our policy to discuss personnel matters, we want to make it clear that this former employee was fired for cause. Signed affidavits from current employees attest to this former employee’s failure to perform her required duties in the workplace. In addition, they attest to her participation in an attempt to undermine or oust certain members of management. This former employee demanded a sum of $50,000 upon her departure. Under no verbal agreement, contract or any other type of covenant was this person entitled to such a sum. After learning that WrkRiot would not pay what it considered extortion money, this former employee began her campaign of slanderous of activity over the Internet. WrkRiot believes this former employee’s writings have led to dangerous situations for many of our employees through the leaking of personal information and through threats being made over social media from others who have taken the former employee’s misinformation as truth. We regret having to spend time and effort on this when there is so much to do in the development of our unique application. However, we want to make it abundantly clear that the slanderous writings of a disgruntled former employee do not represent the truth about WrkRiot, its management or workforce. The racist, sexist and abusive comments our employees have received are inexcusable. Further, we want to make it clear that we will seek any and all legal remedies to end this campaign of slander.
I find it amusing what people come up with when trying to wriggle out of the shitstorms they create.
As a marketer this is brilliant since its good exposure. Plus the shame means she probaly will get paidor at least score payback.
If I was an American, I would be doing this regardless....
This facebook post of theirs just did two things
1.) Confirm its them. 2.) Lose them the ability to settle this quietly.
They could have quietly sat down with Penny and sort this out, but they didn't... that ship has sailed, they had one card in the deck to play, which was "Heres money, now take the post down and sign this non-disclosure".
But by posting it this on Facebook, then well .. they lost the ability to pretend it was not them.. there goes the ability to enforce a NDA.
They won't pay her now, the best they can do is "Don't go to the DA and we will give you the money" Which they won't do.
Which makes me wonder, why isn't she under an NDA already? Every one I've signed prohibit discussing practices even after termination for cause.
Anyone who uses that term tends to be appealing to emotion rather than proposing anything of substance.
Are you claiming that "victim blaming" isn't a thing? There are plenty of people that want to shuttle blame/responsibility around, and will blame the victim for not making better choices, while absolving all others of guilt.
Take this incident as an example:
"Well, none of those employees are being forced to work there, so it's their own fault for not getting paid. They should have just chosen a more trust-worthy employer!"
I think the point is clear: "victim blaming" isn't a thing" isn't that claim, so why are you asking?
Your example is one where some fault lies with the employee, namely employment due-diligence, although not entirely. Its possible for both parties to have partial blame for the totality of faults leading to a situation. A "victim" can also be at fault, as in the drunk-driver example.
Have a nice nice life distancing yourself from any responsibility.
> They'll say something about being able to leave, but completely ignoring the situation being extremely stressful and scary. Victim blaming and a complete lack of empathy will ensue.
I was (am still am) a new grad with no experience but I had co-workers with families and responsibilities. We all wanted it to be true too badly and willfully ignored the warning signs.
See California Labor Code Secs. 204 & 215.
http://leginfo.legislature.ca.gov/faces/codes_displayText.xh....
Now, given everything else here I wouldn't be surprised if there was fraud involved in getting the H1B visas issued, but that's separate from the question of whether people who think they have H1B visas actually have H1B visas.
However, if the founders are willing to forge money transfer receipts, and given all the other hijinks in the post, I wouldn't put it beyond them to bring over engineers on a tourist visa, instruct them to not tell immigration they're coming to work for some BS reason, and then mislead them by telling them that their H1B is being processed when in fact it isn't. Or something along those lines.
I really feel bad for them, along with the author of the article.
Which also means that if they believed they have a H1B, they could have been misled into staying illegally one way or another (OPT has some reporting requirement, you have to notify your school every 6 months and anytime you change jobs/ locations etc).
i bet the ceo told them that the papers were still being processed and to get to work....ironically since he never paid them, he might be legally off the hook for immigration violations.
This might be counterproductive in some instances, but if something doesn't smell right, I'll try to blow it up and make all the dealings very public.
I mean, there are no personal feelings involved. You are paying me to be a worker. No pay? No work.
Scumbag Startup: "We fired Screwed Employee for cause."
Screwed Employee: "No you didn't! It was retaliation."
Scumbag Startup: "Sure we did. Look at what he/she posted publicly after leaving the company. Screwed Employee behaved similarly around the office and was negatively impacting the work environment."
When I said blow things up and make things public, I meant make all my communications with management and the company very out in the open, CC everybody.
That way, if they do fire you for cause, you have a paper trail, and you tend to keep a lid on their worst tendencies because then they have to justify their words/actions to their own employees.
No, you never escalate publicly, not to people outside the company. As long as everybody is CCed while the conversation is going on, they don't have a leg to stand on, since everything is factual.
This is before anything is really bad, but you are getting suspicious.
If you hire a lawyer, you're instantly at DEFCON 1. CCing all your teammates has plausible deniability, especially if they're in the same boat you are.
You're not trying to warn anybody here. You're raising a gigantic red flag saying "Hey this is happening to me. If this is happening to you too, let people know instead of just suffering in silence."
No, when you hire a lawyer and provide them documentation on what has transpired and is transpiring, you are just building an arsenal to be prepared in case of further escalation.
When you have your lawyer contact the company, even then, you aren't at DEFCON 1, though that is a significant escalation (or a response to one.)
When you file legal action against the company, then you are at DEFCON 1.
If you ever email your coworkers, and CC your boss/fellow employees that you've done so, you're at DEFCON 1.
That implies that legal action is imminent.
If you BCC your lawyer, or just save up the information for later, that doesn't escalate the situation quite as much and allows people to back down more.
It looks like the rats are fleeing the ship:
https://medium.com/@dtunkelang/lesson-learned-ab0dc6723b8c#....
Definitely fraudulent.
Its not clear to me that it is criminal fraud; its clearly deceptive, and its clearly intended to defuse expected responses to the already-criminal failure to pay regular payroll, but I'm not sure its an independent crime.
But, you know, there are people who taxpayers pay to investigate the kind of thing described in this article (like the local DA and the California Department of Industrial Relations) and I'd defer to them on exactly which bits of this affair are which crimes.
http://www.nytimes.com/2016/09/01/technology/a-silicon-valle...
And the marketing...if "wrkriot" is really the new site, this is just sad. The latest post on "Goals" is just SMART goals without even mentioning the acronym...wow.
The CEO of this startup qualifies be listed under the other discussion on here about psychopaths running companies.
I'm almost certain that this is the post he had in mind while writing this comment.
In this case, the phrase "criminal acts" seems more appropriate.
The ones I consider serious are these: 1 (hire/fire fast), 4 (given responsibility without authority), 6 (unclear product), 8 (weird money habits), 9 (law problems).
Others I consider quite important: too much money without backing in team strenght and professional attitude (either founders or investors are bullshitting someone), don't trust the team (when shit hits the fan everybody will cover their ass and taking care of others may be considered breaking your employers trust), act context aware (opinion is more important than actual facts, consider when to tell which fact/idea to whom, when everybody is happy because of a successful lie then you have low leverage for the moment).
In any case I think you need to have a few of these experiences to be able to survive in a business environment. When stakes are high, information is hard to come by, and you don't have years to learn to know the other parties, then people will do unexpected things (lying, faking success, spying, or simply not supporting you when you are under attack). Important resumee point: I survived X scams.
For most developer jobs, you don't need it.. because with the job market, it is very easy to find a new job if one flops. But if you had to make a move cross country? It may be easier to get signoff on severance.
Wait, what?? Is the "shortage of engineers" meme back?
It really depends on how much leverage you have, and what you're concerns you have with the company.
I knew someone who was hired to head up the regional operations for a business that was based overseas. He was worried that they weren't really committed to the local market, but they assured him that they were, and that this was a long-term position.
So, he negotiated that if they closed down his location in the first 12 months of his employment then he would get a very large severance package. Since they were absolutely committed to the market, they agreed.
Less than 2 months into the role he got to hold them to that severance deal.
Someone else pointed out that some wage laws dictate a specific amount of severance that usually depends on the amount of time that you work there. Most companies go above this though (e.g. the law says 1 week severance per year at the company, but some large companies peg that at 1 month/year instead). If you negotiate for a hard number of 6 months, and you end up working for the company for (e.g.) 10 years, you could be leaving 4 months of severance on the table.
Young people rarely if ever have the leverage to negotiate severance, but If you can, I'd say 2 months at a minimum plus 1 month for each year. Chances are that in a small startup the reason you get nothing is that they go out of business. And if you're a marketer, doubly so.
As I always say, engineers get aqui-hired. And marketers get acqui-fired.
Where's the 4M here that the OP was writing about? She could have checked crunchbase to see that the startup doesn't have money.
The Qatar school of management.
A couple highlights:
"...I'm not happy that all these names and faces are out there." -- Penny Kim
Kim has received 10-20 invitations to apply for marketing positions in SV and Texas.
Kim received a cease and desist order via email prior to the now deleted threat of legal action posted to Facebook.
http://www.inc.com/tess-townsend/medium-post-wrkriot-viral-w...
Argh. That's not the Streisand Effect, the SE is what happens when the subject tries to suppress the story, especially using legal threats (which happened too, but only quite a bit after the Medium post was getting traction).
The name of the phenomenon of secrecy driving up interest is the Information Gap effect, IIRC. Plus, in this case, we can add rubbernecking (also known as morbid curiosity) driving up interest.
And I am looking at this from a software developer's point of view.
In most European countries, not paying your employees in the course of delaying bankruptcy on purpose will be a jail term. I was under the impression that California (as opposed to the rest of the US of A) had pretty strict workforce protection laws, too.
And it doesn't sound like they have any money for lawyers, lol.
This is what you get when fuck people over with giving them their severance. They have ZERO reason to hold back.
I wish this type of stuff was published more often.
https://tessfstevens.com/2016/06/10/the-new-mission-liking-y...
Changed for the worse.
The other thing is one size fits all NDA / non compete contract. Maybe it makes sense for the sales people but for writing code every day inventing things it doesn't make sense for the employee. If people don't want to take the time to write an appropriate NDA / non compete contract I have no time for them.
Also notice that before any actual confirmation or official investigation, pointing fingers trying to find companies that match the description could be a criminal offense as well as you could damage the reputation of totally fine companies.
Well, I mean, that's already been done, but I don't see any criminal law that could remotely be applicable. What crime do you imagine this is?
Heck, I don't even see how posting "it appears from details in the article that it is talking about WrkRiot" could even be civil defamation, even if taking other things into account (Such as the source article) the net effect is damaging. Even if the source article would, if deanonymized, be defamatory.
Damaging reputation alone isn't generally actionable, at least in US law. Knowingly (or recklessly) making false statements that damage a company may be.
Disclaimer: Note that these are still technically rumors from the Hacker News comments that seem plausible but there has not been explicit confirmation, besides the author "recommending" a comment on Medium that points to this thread saying that HN has figured out the name.
Thats confirmation in my book
Maybe legally, but not so much morally. The lies are part of calculated fraud. Nonetheless, a very good cautionary tale. I've seen several friends of mine chase "Too Good To Be True" dreams.
Wonder where all that money went. ;-)
https://techcrunch.com/2016/08/30/wrkriot-vanishes-after-sca...
with all the troubles, I wonder how the founder could just keep going. may be it is as the story says, "default human condition to not give up" but at what cost.
Each name worse than the last...
http://reddit.com/r/startups/comments/3m3lp6/failed_startup_...
This is codependence, defined.
The problem is that "fair market wage" is actually defined legally by congress. That wage for IT related jobs is barely enough to make a proper middle-class living in a metal trailer 2 hours outside of Las Vegas, much less San Francisco, New York City, or even Atlanta.
So you basically base your office in a city where the COL is high, require your employee to live in said city, and post job listings with a wage no US Citizen who lives in that city would take. If you get anyone actually desperate enough, you invent some magical reason they don't qualify. Not enough experience (10 years for a tech that's been out 2), didn't have experience with JMS (1 out of the 2,000 tech keywords on your listing and honestly if you can write a java application you can read a JMS queue, it's 10 minutes of google), or any of the other reasons you can invent to not hire someone. It's the exact same strategy deployed to not hire someone based on sexual orientation, gender identity, or ethnicity.
Then, you get your cheap H1-B worker who can't leave your company or even change their job title or they get deported.
I hope the state prosecutes the hell out of them, and the founders are left living under a bridge.
The company needs to be named and shamed, otherwise they will keep getting away with this trash. People will still sign up to work for them, not knowing what is happening. By putting the name of the company out there, those people can be informed, and make a better decision.
Is this satire?
The CEO of this "company" is basically Russ Hanneman without the money. Instead a boat load of debt.
We detached this comment from https://news.ycombinator.com/item?id=12386468 and marked it off-topic.
> I don’t when or how the money became an issue
Typos happen.
icymi
Saying this would never happen to you is pretentious and ignorant.
It's good that you stopped by to point out that you're better than others, though. Looks good on you.