[jaredhansen]

>Why do companies wait till the dying moments before informing employees?

Because if you tell employees how close to the edge you are they often run out the door, moving your odds of failure from 50% or 70% or whatever up to ~99%.

Personally, I'm a stickler for integrity and scrupulous honesty so I have never hid facts from employees even when it was dark (and for a couple of years, it was often really, really dark). But I can see why people do it: when you're in the middle of trying to close a save-the-company funding round, with 2 minutes left on the clock, losing half your team doesn't exactly help. And that did in fact happen to us several years ago: I lost almost the entire engineering team early in our company's life because they freaked out and bailed when they realized how little cash was left -- and this, in turn, torpedoed a number of funding efforts that were underway, almost sinking the business.

Again: don't take this as an endorsement of hiding the truth. But many, many good companies have been days from bankruptcy multiple times, and if everyone had known it at the time, people would have bailed out and the company would have failed. So that's why management often wants to conceal bad news from the rank and file.

[Disruptive_Dave]

> But many, many good companies have been days from bankruptcy multiple times

This. For many (most?) early stage startups, every single day you're on death's door. You learn to live with it.