[colinmorelli]

I appreciate your take here, but frankly I think it ignores the absolutely enormous world of vendors and partners out there, and the challenges that startups face when navigating it.

Quite simply, there absolutely is neither enough time nor mental space to deeply evaluate and understand these types of risks for all of your vendors. Further, this is one of those risks that is abundantly clear in hindsight but a person without deep financial experience or one who hasn't gone through this exact problem would really have no reason to understand or ask about it.

In fact, a person without intimate knowledge in payroll software might have no reason to even understand that there is an intermediate bank account in which funds are parked en-route to employees. It's just extremely unrealistic to expect someone to be thinking about this when picking a payroll vendor. Just like it would be unrealistic for me to expect an employer to perform a deep analysis of an insurance company's historical MLR and books to ensure they're sufficiently liquid and solvent to fund an employee's medical emergency.

Like it or not, social proof is a fairly critical construct in the world, and without it we'd be stuck spending more time analyzing our decisions than we do living with them.