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So the firm borrowed money to employees?
In simpler words: Bolt helped employees take out personally guaranteed loans to give Bolt money.
In the loan terms, if the employee leaves for any reason, the employee owes Bolt the entire loan amount within 90 days of end of employment.
I don't get the value of this company. How can fellow SWEs who learnt about kernels, networks and hardware (among other incredibly complicated works) get excited about ONE CLICK CHECKOUT? Maybe this is the JS boot camp effect.
(massive) Capital misallocation, i'd imagine
> A Bolt spokesperson says that only a "single digit" number of laid-off employees took out the loans, despite more than 200 people losing their jobs, and that the aggregate amount was below $200,000. Moreover, she says the company plans to "work with" those individuals. If the amount was less than $200k, which is about the salary for a single employee these days, Bolt should just have annulled them entirely. The PR…
> Bolt should just have annulled them entirely These loans were made cashlessly as part of an early option exercise. That is steeped deeply in the internal revenue code. The forgiven principal would be at the very least income. Then the tax benefits from the early exercise would retroactively apply with penalties and interest. All of this assuming the IRS doesn't view the move as a heads I win (if the company does we…
IIUC, Evergrande strongly "encouraged" execs to take loans (secured against their income - which was considerable) to buy Evergrande "investment products".
Obviously, this was just a way to pay employees with their loan. If things blew up - the employee is completely screwed. If things don't blow up (which seems unlikely when an employer has reached this level of desperation) - then it's still not clear it was worth the risk premium to the employee.
This literally feels like something from a dystopian novel - where you take out loans to get your salary - and you only actually make money if your company grows 10x in one year - and even in that case your benefit is slim - while the VCs and founders walk off with 85% of the gains.
Hardly anyone understands finance - and most people underestimate how greedy some people can be. I feel like there would be no end to suckers who would fall for this trap.
Earlier quoted context omitted.
I am not sure that is fair -- what if someone decided to buy out their vested shares with their own money? They would be screwed while those who borrowed from Bolt wouldn't be. It is just generally problematic.
I am willing to bet no one did this.
I agree when it's 10s of thousands or more the optionality isn't worth it for almost anyone. And it's hard to imagine borrowing to exercise could ever be worth it.
I've never encouraged or discouraged any employee from making an exercise decision (I don't want to get the liability of giving tax or investment advice). I don't even encourage them to file 83(b) except that when I explain why it's a pain for the company if they don't do so, everyone has figured it out immediately :-).
I don't get the value of this company. How can fellow SWEs who learnt about kernels, networks and hardware (among other incredibly complicated works) get excited about ONE CLICK CHECKOUT? Maybe this is the JS boot camp effect.
I was just about to make this point. How does "one click checkout" become worth $11B? (massive) Capital misallocation, i'd imagine
[1] https://news.ycombinator.com/item?id=31510453
[2] https://www.theinformation.com/articles/bolt-seeks-valuation...
I don't get the value of this company. How can fellow SWEs who learnt about kernels, networks and hardware (among other incredibly complicated works) get excited about ONE CLICK CHECKOUT? Maybe this is the JS boot camp effect.
I don't get the value of this company. How can fellow SWEs who learnt about kernels, networks and hardware (among other incredibly complicated works) get excited about ONE CLICK CHECKOUT? Maybe this is the JS boot camp effect.
What I don't get is thinking it's so massively compelling as a competitor to these existing systems.
I don't get the value of this company. How can fellow SWEs who learnt about kernels, networks and hardware (among other incredibly complicated works) get excited about ONE CLICK CHECKOUT? Maybe this is the JS boot camp effect.
I don't get the value of this company. How can fellow SWEs who learnt about kernels, networks and hardware (among other incredibly complicated works) get excited about ONE CLICK CHECKOUT? Maybe this is the JS boot camp effect.
From what I've seen, you find a charismatic dude with a good story that they probably even believe themselves, and another dude with a lot of money who wants to make that into even more money and you get them together. Then you find more believers.
It's more akin to religion than anything else, but employment seems like the new religion for many - it's certainly an integral part of identity.
So the firm borrowed money to employees?
My understanding is that Bolt lined up loans for employees to cover employees' tax burdens due to exercising their options. In simpler words: Bolt helped employees take out personally guaranteed loans to give Bolt money. In the loan terms, if the employee leaves for any reason, the employee owes Bolt the entire loan amount within 90 days of end of employment.