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Bolt Financial's loans come due

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Re: Bolt Financial's loans come due

#31

Post by sfblah »

bhouston wrote: post #6
bombcar wrote: post #3

> 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…

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.

Same problem with the student loan forgiveness being pushed in the US currently. My cynical take is that they’d just do the forgiveness and refuse to talk about the people in the situation you described.

Re: Bolt Financial's loans come due

#32

Post by toomuchtodo »

JumpCrisscross wrote: post #25
onlyrealcuzzo wrote: post #13

Earlier quoted context omitted.

This is sort of similar to what Evergrande was doing with executives, right? 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…

> where you take out loans 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 Better: the VCs own stock with liquidation preference over the common stock they loaned you money to buy. If there's venture debt, they are also part of the estate that will be paid by those loans if…

Can the SEC pursue Bolt for this?

Re: Bolt Financial's loans come due

#33

Post by gruez »

hoofhearted wrote: post #20
madamelic wrote: post #11

Earlier quoted context omitted.

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.

Doesn’t all this smell ENRON’ish?

In what sense? Searching Enron's Wikipedia article I couldn't find any references to employees getting loans to buy stock. The only way they're similar is "dubious company crashes and burns, employee's equity turn worthless", but even then the similarity is limited because Enron was a case of fraud and bolt isn't (at least to my knowledge).

Re: Bolt Financial's loans come due

#34

Post by xwdv »

Imagine if getting fired and immediately owing a vast sum of money to your employer became a common practice at most companies. Might lead the way to higher levels of employee retention and may be seen as some kind of solution to people not doing their jobs or doing the bare minimum just for a paycheck, especially in undesirable but necessary jobs.

Re: Bolt Financial's loans come due

#35

Post by FollowingTheDao »

sydthrowaway wrote: post #10

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 you are experiencing is the cognitive dissonance upon realizing that the last 14 years was nothing but a financial mirage.

It is all unraveling now. No one was excited about "one click checkout". They were excited about the ROI.

Re: Bolt Financial's loans come due

#36

Post by pjc50 »

sydthrowaway wrote: post #10

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.

That was the original Amazon "one click" patent!

It's not the fellow SWEs that care, it's the observation that every step removed from the checkout flow increases conversions and therefore revenue.

Re: Bolt Financial's loans come due

#37

Post by czbond »

bastawhiz wrote: post #27

Maybe someone can clarify this for me, because I'm not sure I understand how this is possible: when the loans were announced, it was said that ~half of employees took the loan. But here, when 200 people were laid off, only a "single digit" number of employees that were let go had these loans. Even if that number is 9, that's like 4.5% of the laid off employees. How is that possible, except by Bolt explicitly not layi…

You need more facts - the loans may not be an even distribution across 50%; I expect loan support was skewed towards the upper part of the pyramid

Example - some staff may not have had loans/shares (eg; customer support, etc) and the loans may be for senior and up roles who have enough shares to worry about the high taxes on shares.

Re: Bolt Financial's loans come due

#38

Post by _fat_santa »

sydthrowaway wrote: post #10

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.

Engineering vs Product. You can have very exciting engineering behind what is otherwise a very boring product. I'm currently leading a React Native app team and from an engineering perspective, it's very exciting. Bleeding edge everything, fabric, hermes, beta and alpha versions of multiple devtools, etc. From a product perspective it could not be more boring, we're building an app to help insurance salespeople track their sales.

And of course there's always the money, for the right price I'll work on whatever you want me too. If someone offered me a job building Windows Vista widgets for $1M/yr, you can bet I will take the job and be very happy.

Re: Bolt Financial's loans come due

#39

Post by dhd415 »

JumpCrisscross wrote: post #7
bombcar wrote: post #3

> 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…

>>I'm somewhat blown away by this whole thing. Leverage to finance an already-leveraged derivatives position on illiquid stock. From the issuer of said stock. Who is also the borrower's employee. That's both risky and dodgy!It's risky, but not necessarily dodgy. Many employers do not even permit early exercise and I wish more did as I could have substantially reduced my tax burden in some situations. Taking loans for early exercise is risky, but ultimately, we're adults who are responsible for our own decisions. Certainly it would be bad if Bolt misled employees into thinking it was a risk-less proposition, but I've not heard anyone claiming that.

>>Bolt positions the "below $200,000" sum as a win. I don't see it that way. That's below the lower bound of the accredited investor income test. The people taking out these loans by legal definition couldn't afford the risk. Yet Bolt doubled down and gave them leverage?If the aggregate loan amount to laid-off employees was $200k, that says nothing about whether they qualified as accredited investors. Further, the accredited investor designation is an arbitrary one. It's perfectly possible to not be an accredited investor and still be able to afford the risk of early option exercise.

Re: Bolt Financial's loans come due

#40

Post by FollowingTheDao »

xwdv wrote: post #34

Imagine if getting fired and immediately owing a vast sum of money to your employer became a common practice at most companies. Might lead the way to higher levels of employee retention and may be seen as some kind of solution to people not doing their jobs or doing the bare minimum just for a paycheck, especially in undesirable but necessary jobs.

What you are describing is indentured servitude. And might I add that it is scary you even think this is close to a good idea.
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