Startups are not established businesses. They are inherently risky ventures.
If you want to be coddled and showered with benefits, go join a Fortune 500. Startups are not for you.
If you want to be coddled and showered with benefits, go join a Fortune 500. Startups are not for you.
This is not normal behavior for any company, and you should run away from anyone trying to convince you otherwise. The people responsible should be treated like pariahs.
Think for a moment how far $260 million gets you when you have 1500 tech employee salaries in Seattle to pay. Plus operating expenses. Don't forget to add 15.3% for payroll tax. Median software engineer compensation in Seattle is 219k. Infrastructure and office space isn't free either. Seattle office space averages $43/sqft and the average employee space is 150-175 sqft.
That. Money. Is. Long. Gone. It's not a bad take, you just won't do basic math.
Raising $260M doesn't mean you're rich. The investors expect you to spend that money and otherwise why are you raising that much?
They spent 4 months looking for a buyer and had already shed 1000 employees before shutting down operations. It's not like current employees were clueless about what was going on.
Functionally there's little difference between operating up until now or giving 500 "chosen, lucky" people severance 3 months ago.
I'm sure very few of the people whose continued work they were depending on for a sale would have stayed this long if they realized they were going to be treated like this.
Actions and comments like this are how you kill an ecosystem.
Just because you remained does not mean that your job is secure. This is strictly common sense.
Also I've had a pretty long career and I don't know of any company in this situation who paid 500 employees severance after ceasing operations.
https://www.hollywoodreporter.com/business/digital/inside-qu...
They absolutely cratered within six months of launch.
I wouldn't use them as an example of how to competently operate a business. They literally gave all of the investors' money away. They operated more like a charity than a business and if I were one of their investors I'd have been suing.
As if a month or two of severance, which I'd wager your average critic in this thread would promote as laudable, would do much of anything in the grand scheme of job security.
Given the upside of a company surviving, or even ultimately succeeding, as an employee, I'd rather try to help a good/fair company ride it out and survive than folding early to pay out a few months.
Are these thousands of successful companies? Or failed companies?
> Actions and comments like this are how you kill an ecosystem.
Sorry.
And you aren't being "let go" - the entire company is going under. If you are laid off and the company stays healthy, it makes sense to have some concessions. But if the entire business ceases to exist. I don't know why would you expect anything from it.
Talk about insult on injury. Gotta love the lobbying that allows that.
Now healthcare shouldn't be tied to employment, and it's not in my country. But this is the political choices of Americans in America. Not the fault of the individual companies who are subject to the system.
So you could work for Bezos, or you could work for these guys. I've made my choice.
They want to be able to hire good people tomorrow so they pay you severance today.
The company in question here is dead. There is no more money coming in and no business to operate.
Startups are risky and even though you work at one, I don't think they're for you. There's plenty of other union labor jobs with pensions out there that seem to be more your speed. Your position isn't a reasonable one.
You want to have your cake and eat it to. All the rewards of being an early stage startup employee without any of the risk or skin in the game.
The risk to an employee at a company that got $250 million should only be accepting options that could be worthless in lieu of a portion of salary. There absolutely does not need to be any risk of losing healthcare, lacking severance, or any other loss of benefits. Founders want you to believe this but it doesn't have to be true.
This is constantly looming over your head and used to be something understood by startup employees before the era of zero interest free money and "startups are kewl".
Any money raised got spent, otherwise they didn't need to raise it.
The trade off to take on the risk of being underpaid and possibly soon-to-be-unemployed by a startup are the potential equity payoff, the work environment and the human-networking. And it's usually worth it because you're buoyed by the local startup community and the high chance you get another job with people you know tomorrow if things don't work out.
The problem here is that our industry is flooded with the types of people who would otherwise have become lawyers or finance people because they chase comfort and status as opposed to a desire to work on cool shit with cool people. It kind of makes me hope these conditions extend for a while to weed out the people who don't belong and we can get things back to relatively-normal.
The only people who insist this must be true are founders that want to unload as much of the risk on their investors and employees as possible so that they themselves carry little to "skin in the game"
The only things that matter are cash on hand, burn rate and your ability to raise new money. Convoy's cash on hand was tiny, its burn rate was enormous and its ability to fundraise was zero.
"why it is a requirement" has nothing to do with the law, the whims of "the founders", etc.
why it is a requirement is an economic truth - if there are enough players that believe that a gamble on working for an early stage startup is worth taking on some substantial, but perhaps not ruinous, risk, then that sets the bar.
> Founders want you to believe this but it doesn't have to be true.
Whether that is true, or "has to be true" depends only on the market. It certainly seems that it was true very true and probably still is. But neither you, the law, nor the founders have any control over whether it is worth it at the moment in your situation.
Fortunately, there are many startups whose leadership is prosocial enough to try to offset some of the risk to its employees.
Since you seem like a Chicago School kinda guy, I'll put it in terms I think you can understand: employment is a market, and I am fortunate enough to have a optionality. It's bizarre that you fail to recognize that; it's pretty critical to your own analysis.
They're shitty coworkers too.
I just picked my best option in an open market...
These are the same types of people who think tech workers are treated so poorly that they need to unionize and should be free to spend their work time doing political things that have no contribution to the company bottom line.
It has nothing to do with negotiating the best deal for yourself. Severance is voluntary and is rarely negotiated up front. Especially at the level of employment for the 99% we're talking about where the company going out of business really matters -- negotiating severance up front is like negotiating a prenup. It's requires leverage and people in these income brackets don't have it.
The business (Convoy) should have shut down in e.g. August of 2023 when it was clear that they still had enough cash to pay out severance and still cover the expenses of winding down the business. They did not take this option, choosing to instead risk it all that they could bring in an infusion of cash without firing folks.
This is not "boilerplate vapid moralizing nonsense"; to take such a risk when you have a company of 500+ employees is a poor business choice.
The fact that they continued to operate for 4 months with no new investment is the same as if they had shut things down then and offered severance.
There was no gamble here like your comment implies.
Smart business choices rarely align with choices that I benefit employees.
A lot of even large companies never leave the startup phase.