Exact things happened in case Slack. When they were pivoting.
The fired all their to leave an impression (to existing employees) there is no point of exercising the stock and then after 2 months re-launched as Slack.
Food for thought.
Ask HN: Company is firing all employees – should I still exercise my options?
61–70 of 94 posts
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#62Can we start flagging the rich people threads?
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#63I don't know your financial situation. Maybe $13K isn't much to you. However, I probably wouldn't buy these shares for the following reasons: 1) The company just fired all of its employees 2) The company just fired all of its employees 3) The company just fired all of its employees That's a really bad sign. Even if they raise additional money, it likely won't be on good terms. With the price of bitcoin way down from…
This. Maybe you have faith in the product and the IP, but these are worthless if the people who can help transfer all the knowledge to a possible acquirer are gone.
If the founders were the only engineers maybe there's still some chance that they can manage an acquihire for themselves, but it would be worth pennies, and any transaction will likely be below your option execution price.
Firing all the employees is a rather transparent signal that liquidation events (or any financial events) are off the table, and founders are simply debulking expenses to kill the company.
Also, the simple and straight forward solution to your problem is simply to ask them. These might be hard times for the founders but a short and candid message asking about the situation wouldn't hurt. They probably don't want you or anyone spending their money in a dead company.
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#64I don't know your financial situation. Maybe $13K isn't much to you. However, I probably wouldn't buy these shares for the following reasons: 1) The company just fired all of its employees 2) The company just fired all of its employees 3) The company just fired all of its employees That's a really bad sign. Even if they raise additional money, it likely won't be on good terms. With the price of bitcoin way down from…
Almost certainly any new money raised would be on terms that wipe out nearly all existing holders of equity.
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#65I don't know your financial situation. Maybe $13K isn't much to you. However, I probably wouldn't buy these shares for the following reasons: 1) The company just fired all of its employees 2) The company just fired all of its employees 3) The company just fired all of its employees That's a really bad sign. Even if they raise additional money, it likely won't be on good terms. With the price of bitcoin way down from…
Thanks for your answer! You hit the spot with some things. I am definitely emotionally involved with the company and considered the option of exercising only some of the options - that might be the best option at the moment. One thing to point out is that there is still a month worth of raising time (with all employees still in the company), which is significant in startup terms.
> I am definitely emotionally involved with the company
If you can find objective metrics that justify investing, great. But if the majority of your decision is emotional it's probably not a great choice.
I would look at what they're doing not what they're saying. They're playing up their opportunities, but firing everyone. The actions speak louder than their words.
Almost every startup has a great idea, a great product and a great team (and if they don't they will still sell you on the idea that they do have all these things).
What great startups have is all of those things plus great market fit plus great adoption plus great investors.
If it's all show it's a no go.
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#66If you had $13k to spend and felt like making a wild bet I'd just dump it all into AMD right now and sleep like a baby for the next few years.
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#67Are they trying to raise money at higher or lower valuation than your options? Taking liquidation preferences into account are you getting a better or worse deal than the investors?
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#68If you have a few $m in the bank, go for it. It's a loss you can write off on your taxes. Otherwise run away. If they are laying off and desperate to raise funding the next round will dilute your % so much to be worthless. I am on my, hum, 6th startup, making millions on one, 3 crashing and waiting / zombie on 2 others. It is all a risk game, easier to play if you already have the buy in stake. If you do not, do not bet the pot on a suite pair in the hole.
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#69Nah. If you believe in crypto, just use the money to buy BTC or something else.
The only other situation where I think it could make sense is if you plan to write it off to offset capital gains elsewhere.
Re: Ask HN: Company is firing all employees – should I still exercise my options?
#70It really depends on your financial situation and what $13K means to you. I would probably hedge my bet in case the company does succeed and you end up kicking yourself. Maybe exercise some part of it, not the full $13K.