Ask HN: Are these signs of a failing startup | Hacker News Reader

Ask HN: Are these signs of a failing startup

3 pointsemployee1236 comments

I just joined a startup which has been running for more almost 2 years now as a remote dev and have been with them for about 5 months now. Currently, we do not have any strong revenue coming in and have about 2-3 customers, it's a SASS/b2b product so I can understand if we don't have that many customers. Last month, the salaries of employees was slashed by more than 50% & I was told by the CTO that because they didn't really have any revenue, investors advised that they reduced spending. A senior developer already left. I do not have any equity in the startup (because I'm halfway across the world, but was promised when I relocated and started working onsite). Are these signs of a failing startup? Should I jump ship? I'm the only dev on the team and it doesn't seem like they are hiring a replacement for the senior dev that left which we need badly.

Get out now! If the investors believed that the startup had legs, they would put more money in, not suggest cutting costs. Reducing salary is a huge red flag, and there is no upside for you with no equity. You'll never get the lost salary back even if they become profitable.

I would think if they aren't adding new customers that's a problem. Are there any new customers in the pipeline? how long is the sales cycle? I would think they need to replace some of that salary with equity. Also, you have to question that leadership of a company that's cutting salary's of employees over themselves. Unless, they're already working for free.

the CTO told me that everyone, including the founders had their salaries slashed, save the senior dev who already left.

I'm not sure if there are new customers, maybe just one.

Then you should get some equity if you stay.

Equity in a two-year-old company with 2-3 customers and not enough revenue to pay its employees is probably worthless - looks like this company won't be around for much longer. Time to look for another job.

What do you mean, the salaries were slashed? How is that even possible?

Anyway, just run.

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