[JumpCrisscross]

> they may choose to use funds belonging to the company (after paying outstanding obligations) to pay severance

If they can do this, they can pay salaries another month. Making a go/no go call at the edge is difficult. It sounds like Convoy thought it was getting a loan that didn’t come through.

Put another way: if the CEO shut down the company while loan negotiations were in place, it would have zeroed out the common stock while giving preferred investors a pay-out (in addition to everyone some severance).

[sangnoir]

> If they can do this, they can pay salaries another month

If leadership decides to use the remaining funds on salaries rather than severance - then they should be judged on that! What good is buying one extra month for a doomed company? That month is more valuable to individual employees who can use it to look for new jobs

[JumpCrisscross]

> What good is buying one extra month for a doomed company?

You don't know it's doomed. Plenty of companies have turned around while running on fumes. This is fundamental to start-ups.

> month is more valuable to individual employees who can use it to look for new jobs

Everyone who lost their jobs at Convoy is eligible for unemployment. The same unemployment most workers get when they're fired. Perhaps the discussion should be around improving this benefit for everyone?

[sangnoir]

> You don't know it's doomed.

It's swell when people gamble with employees well-being on the miniscule odds of a miracle. And even better idea is to offer severance, and those employees with the same appetite for risk can get additional options from the folks who leave. That'd be a win/win, except for the leadership who would rather gamble using other peoples chips but keep most of the winnings.

> Everyone who lost their jobs at Convoy is eligible for unemployment

Unemployment benefits don't come anywhere close to tech salaries! They take time to process.

> Perhaps the discussion should be around improving this benefit for everyone?

We can multitask. What is in my power to control is to avoid working with anyone associated with this decision and encourage everyone else to do the same - board-members and the entire C-Suite. We have a - let's call it poor culture fit

[JumpCrisscross]

> It's swell when people gamble with employees well-being on the miniscule odds of a miracle

You don't know the odds ex ante! Again, they would have been roundly criticized if they'd prioritized severance (which means more for the highly paid) and preferred stockholders over their rank-and-file common holders.

> Unemployment benefits don't come anywhere close to tech salaries! They take time to process

You're arguing for special treatment of well-paid tech workers over e.g. truck drivers [1].

> What is in my power to control is to avoid working with anyone associated with this decision and encourage everyone else to do the same

The solution is to not work for a start-up. That, or gain empathy for the tens of millions of Americans who work for a restaurant or with variable hours or on contracts that provide them with zero heads up when business conditions change or their employer goes under.

[1] https://www.wsws.org/en/articles/2023/08/09/51c3-a09.html

[ditonal]

So tired of companies that raise hundreds of millions from some of the wealthiest and most powerful people in the world trying to pull the “we’re a startup” card. You’re not two dudes eating ramen in a garage and you don’t get to use that image to excuse your shitty behavior.

Also tired of the “other people in poverty are exploited even worse! You asking for basic labor protections shows your lack of empathy for them!”

I’m seriously having a hard time imagining any of this was written in good faith.

The real solution is, and always will be, collective bargaining. These VCs aren’t going to make sure you have healthcare. They could give it to you directly, or they could use their wealth and power to make sure the government gives it to you.

People ask “what can a union do? My office already has free kombucha”. Imagine if all the SWEs at all these VCs backed companies went on strike unless the laid off Convoy employees got six months of healthcare (it would have been in the initial employment contract). The money for this stuff would magically materialize. It doesn’t materialize because there’s no organization to advocate for it, it’s that simple.

[JumpCrisscross]

> tired of companies that raise hundreds of millions from some of the wealthiest and most powerful people in the world trying to pull the “we’re a startup” card

But they are one! If those wealthy people were getting perks in this failure, the way e.g. workers at Good got screwed, I'd agree with you. But if you're running with massive fixed costs and volatile revenue, knowing whether you're weeks or months from shutdown is difficult.

And again, people are assuming if he shut down six months ago everyone could have gotten severance. Convoy is $100+ million in debt. Wages are privileged; new severance obligations are not.

> real solution is, and always will be, collective bargaining

The closer solution is civic participation. How many people in Silicon Valley have written to their state elected to raise unemployment benefits? (Note: I'm not saying anyone deserves what's happening. But union participation in America is stubborn and dropping. We need another drum to beat.)

[slt2021]

I was with you until you mentioned unions.

tech is fundamentally incompatible with unions for several reasons:

  1. it will drive down the wages and give power to just another bureacracy
  2. Union participation does not differentiate between highly skilled (and sought after) tech worker, from mediocre tech worker who gets by using copilot and chatgpt
  3. I dont need union to negotiate with company on my behalf - I can negotiate by myself just fine
  4. If startup goes bust - I can easily find a job at another startup, probably will even get a pay raise - just because my skills are highly sought after and in demand. There is literally zero upside for me that union can do
  5. I dont want to share my specialist employee's power with faceless union burearacy

I know what it means to be a union worker - and trust me, it will never gonna work in software engineering

[eru]

> The real solution is, and always will be, collective bargaining.

As long as I can opt-out of your collective bargaining (both as a worker and as a founder), I don't care what you bargain for.

[kortilla]

Raising lots of money doesn’t mean it’s a sustainable business. I don’t think you know the colloquial definition of startup in Silicon Valley.

Raising millions doesn’t mean making millions either. If you took a bunch of investor money and just paid it all out to your employees and closed up shop that’s a misappropriation of funds.

> Imagine if all the SWEs at all these VCs backed companies went on strike unless the laid off Convoy employees got six months of healthcare

Why would they do that? I’m not going to go on strike because other employees are incapable of understanding the risks of joining an unprofitable company that is default dead. If you want 6 months of paid healthcare, quote it and demand it as a signing bonus before you start.

Startups blow up. It’s your responsibility to prepare for it. Established companies blow up too. Sometimes you even just get fired because you suck.

SWEs have zero excuse to not have saved enough money to pay for cobra for six months if things fall apart.

[cma]

> Imagine if all the SWEs at all these VCs backed companies went on strike unless the laid off Convoy employees got six months of healthcare (it would have been in the initial employment contract).

Congress made secondary strikes illegal a long time ago. Maybe it would still be OK since that wouldn't technically be cross-industry; I'm not sure.

[sangnoir]

> You don't know the odds ex ante!

No, you can simply choose your cut off time for a hail-mary at 2 months of runway, rather than 0 months of runway. Leaders don't have to rundown the clock (and bank balance) to 0 - they may choose to, like they did in this instance.

> You're arguing for special treatment of well-paid tech workers over e.g. truck drivers

Again, no. I'm arguing against your suggestion that the Convoy folks without severance are going to be alright because they have unemployment. I hope none of them are on H-1B visas as they just lost all control to when their clock starts ticking.

> The solution is to not work for a start-up

This is a false dichotomy. There are plenty of startups led by people who do right by their employees; I have worked with some before of them, and I will not hesitate to work with them again in the future because I trust them not to screw me over like this.

[JumpCrisscross]

> you simply choosing your cut off time for a hail-mary at 2 months of runway

I'm saying it isn't that simple to project runway in some businesses.

> arguing against your suggestion that the employees without severance are going to be alright because they have severance

Sorry, we agree on this. This will suck for everyone involved. If it was preventable, that's on management.

> plenty if startups led by people who do right by their employees

When push comes to shove, constraints apply. Shutting down a start-up with cash in the bank isn't something that happens without a fight. There will be lawyers, possibly lawsuits, and delays. Convoy had $100+ million in debt; the employees would have had to fight claims of wrongful conveyance.

Put another another way: the CEO paid employees another few months' salary instead of handing that cash to its lenders.

[fsckboy]

>millions of Americans who work for a restaurant or with variable hours or on contracts that provide them with zero heads up when business conditions change

wouldn't you consider your statement itself to be a giant heads up, right now? Heads up! save some money, don't spend everything you earn. And don't tell me you didn't get a heads up.

[JumpCrisscross]

> wouldn't you consider your statement itself to be a giant heads up, right now

No, I'm saying it's fucked this is the status quo across the country. Making severance--particularly in cases of business failure--the private obligation of the employer is recapitulating employer-funded healthcare.

(That said, yes. If you work at a start-up you should maintain a cash cushion if possible. That, and check your contract's severance terms and ask for them to be proper before the company enters shitsville.)

[bhhaskin]

That is the risk of working at a startup as an employee though. If you aren't willing to take that risk don't work at a startup.

[kortilla]

Don’t join a fucking startup if you can’t handle it shutting down at any given moment.

If you want employment stability join a profitable company or the federal government.

> That'd be a win/win, except for the leadership who would rather gamble using other peoples chips but keep most of the winnings.

It’s a startup! You’re there to try to make the options work out as an employee as well. I would 100% rather ride to the end with any chance that it will take off.

They failed to get a loan in time, it’s not like they knew it was a fantasy that could never work out. They had a viable business and got caught in counter-party risk.

[eru]

> Everyone who lost their jobs at Convoy is eligible for unemployment. The same unemployment most workers get when they're fired. Perhaps the discussion should be around improving this benefit for everyone?

I think you can take out private unemployment insurance, if you are worried about that? (Or just have savings.)

[webdood90]

> Perhaps the discussion should be around improving this benefit for everyone?

Red herring

You're participating in mental gymnastics to validate what is essentially poor leadership. Why?

[suoduandao2]

You’re calling this poor leadership, can you share a time you were in a similar situation and did something different or are you armchair quarterbacking?

[JumpCrisscross]

> to validate what is essentially poor leadership

We don't have enough information to know if it was reckless leadership. If the CEO had an email from a reputable lender saying we'll have funds in your bank account in two weeks, it would have been irresponsible for him to shut down the company to pay off creditors, preferred shareholders and severances.

I'm not advocating for the CEO. Just against condemning him while in the maelstrom. More fundamentally, there is a thread through this discussion which essentially holds that tech workers--we're highly paid!--should have post-termination benefits others don't.

[hluska]

You responded to that with even more mental gymnastics - this time a ‘reputable lender’ who will jump in with an emergency loan then run off.

Then you’ve thrown in another red herring claiming this thread argues that tech workers should have more options. Nobody said anything close. Rather, the argument is that letting your company run down to zero is irresponsible.

[JumpCrisscross]

If the hypothetical of terms on the table for a loan is a red herring, so is the supposition that management had months of visibility into their demise.

Convoy wasn't a pure software business. It didn't operate on massive gross margins; it was operationally (and financially) levered. Decades-old trucking companies are going down unexpectedly; I'm not sure why HN's armchair executives figure they could have called this cleaner.

[vidarh]

The problem is you don't always know it's doomed. A company I co-founded got to within 5 days of insolvency before we secured the next $5m round. The company never got a big exit, but it did sell a few years later, and the product still exists 22 years after.

I think the big question is how well communicated the risks are. In our case I believe everyone knew, and there'd have been no hard feelings if people had chosen to look for new jobs once funds got tight.

[rdl]

FedEx famously got to within days of running out of money early on, and there is a story Fred Smith made payroll by taking the remaining cash to Las Vegas and gambling.

[addicted]

Weren’t they trying to get a cash infusion through an acquisition? Seems like they failed and ran out of money.

[stuaxo]

This is why you need laws.

In other countries they would have to pay the salaries.

[yellow_postit]

We have laws. There’s a trade off between more vibrant economies (easier to start, fail, start again) and more stagnant ones (harder to start but more safety nets).

There’s no perfect set point and the trade offs will always have downsides.

Given the risks of working for a company in the stage Convoy was in I’m not exactly sure this is a bad outcome.