241–250 of 274 posts
Why not bootstrap it if the product is ready? Sell 100 of locks and boom you have some money to produce and sell another 200. Rinse and repeat. I bet there is a bigger issue down the rabbit hole.
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Sorry. That sucks. But why did you spend so long working without getting paid?
They had net 30 terms on the contract and I didn’t think anything of it. That meant I didn’t find out until six weeks after when they missed a payment and then shortly after that shut down the company. Obviously I won’t agree to net 30 again.
Not saying it's impossible, just that it will cut down on your potential clients.
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In the UK, the situation you described is called 'wrongful trading', and company directors can be held personally liable: https://www.icaew.com/archive/library/subject-gateways/law/i... Is there any similar thing in the US?
As I understand it, not really, unless management or the board were freely mixing personal and company assets, for example using a company credit card to pay personal expenses. No evidence that took place here. Reading the law at the link, it says you’re only liable if there was no “reasonable chance” of avoiding insolvency. The sale they were pursuing would have provided enough cash to pay debts so I don’t think it…
Also, does the company have any assets? Even it's out of cash then, unless it's filed for bankruptcy/insolvency/administration (I think it's called 'chapter 8' in the US?), can't you still file a small claims court case?
Maybe get some Aerons in lieu of cash?
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Seems strange that anyone would agree not to raise more funds or negotiate with other parties for their entire remaining runway. I mean, it puts you in the situation that you either sell to that company or you go out of business. They could offer you a fraction of the amounts they were talking about before you signed, and you'd have no alternative. Hell, even asking you to agree to such unbalanced terms seems like a…
Not defending him, but seems like a chump who had exhausted every alternative, but won't talk about it honestly, and prefers to go with "this wasn't a failure, you were amazing, I was amazing, product was batshit amazing, onwards to our next adventure!"
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> And they were succeeding. Were they? Source? How big was their beta? What was their revenue? Beta users will bias toward early adopters, and often not represent the mainstream market necessary to make a company profitable. EDIT: I just read that they had ZERO revenue. So they certainly weren't succeeding.
They took preorders.
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As I understand it, not really, unless management or the board were freely mixing personal and company assets, for example using a company credit card to pay personal expenses. No evidence that took place here. Reading the law at the link, it says you’re only liable if there was no “reasonable chance” of avoiding insolvency. The sale they were pursuing would have provided enough cash to pay debts so I don’t think it…
I wonder whether directors' salaries were paid whilst contractors' invoices were overdue. Also, does the company have any assets? Even it's out of cash then, unless it's filed for bankruptcy/insolvency/administration (I think it's called 'chapter 8' in the US?), can't you still file a small claims court case? Maybe get some Aerons in lieu of cash?
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It's likely that several of these employees are legitimately broke (for reasons beyond their control, not because they're bad at adulting), but they conceal it. Signs of weakness harm your negotiating position.
Honest question: What normal circumstances would lead to anyone making six figures being broke that doesn't involve bad adulting?
My partner worked in an industry that laid off 50% of their employees. It took her 8 years to get close to her old salary. No matter what anyone says, the reality is very few of us are truly prepared to have our jobs/industry vanish.
My brother who doesn't earn much money had significant health bills for one of his kids. I hadn't planned to spend that $10-$15k.
My idiot nephew road a dirt bike on a road (against all his parents' rules) when he was 15 and didn't have a license. He didn't look both ways, there was a truck coming, and he was hit by the truck. His parents had to buy the guy a new truck because my nephew wasn't licensed to drive, and pay the deductibles for several surgeries.
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This is almost the definition of bad adulting. If you make six figures, there's so many ways to live in the US within your means. Of course you can create difficult circumstances for yourself by paying 4k in rent as the sole provider, but this is irresponsible.
What's the deductible on your health insurance, my dude?
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Those were exactly my thoughts upon reading it. “Four weeks from generating revenue” and then sudden death because of a failed acquisition sounds like awful planning for a well-funded startup. Also, it’s a damn internet-connected door lock with Bluetooth. Do you really need $45M and designing new mechanical systems from scratch to make it work? I’m sure their team did amazing work but all of it sounds incredibly head…
It reminds me of Juicero. The mechanism was total overkill -- it was actually very well engineered and machined as though cost was no object. They would have taken a loss selling them even at $699. The mechanism of a deadbolt is pretty simple. Other smart lock companies do fine with simple mechanisms. The way to differentiate a product in that space is ease of use and battery life, not by needlessly over-complicating…
I would argue that it wasn't really engineered at all. Almost anyone can build something with a practically unlimited budget; engineering is a game of trade-offs. That juice press was ridiculously over-designed and didn't need to cost anywhere near that much.