Beware self-funded Startups: failure can haunt you for a long time

After years of success and decline, I'm stuck with over $150k in debt when we didn't bring our expenses down as fast as our income dropped. It didn't help that not everyone on the team was exposed equitably to our debt instruments (all personally guaranteed, such is the only way in a new company). I had better credit, and even though I own a smaller part of the company, my credit lines were the ones that got expanded (which I didn't even know was happening).

After stripping expenses to the bone, the business might slowly pay off it's bills, say after ten years or so. It does have millions of users after all. Which means that this debt will haunt for years, and I can't just leave it all behind, I'll have to deal with maintenance, etc, for the foreseeable future.

My business partners bought homes at the peak, so between the business and home, bankruptcy is looking like their option (I was not so, uh, unlucky in my timing and have equity). Either way sucks.

And now I'm looking to do something new. And while failure might be rite of passage in startupland, hiring someone with such unrelenting financial pressure is not really likely, is it? And the credit report problems (business cards get switched to personal cards when not paid on time, and guess which ones of them all didn't get paid on time? Yeah those with my SSN) will cause problems with a corporate job, as credit reports are such a big thing in hiring these days.

Lesson learned: get investors; share the wealth, share the risk.

So HN: what on earth do I do now?

"millions of users" - is that serious, or sarcastic? I couldn't tell. If you have millions of users, I'd suspect you can find a way to monetize them a bit more than what you already are to get that $150k debt down faster - perhaps even a direct appeal ala Wikipedia.

While credit checking for hiring does happen, it doesn't happen everywhere, and you can likely explain your situation reasonably such that it doesn't become an automatic strike against you. There may be some jobs that are not available to you now - you might not get a defense contracting gig - there are others.

Is the $150k split between the 3 of you ($50k each roughly), or is your share of the debt $150k (as in it was $450k)? The rest of the team probably won't want to voluntarily take on more debt, but they might be willing to help you pay down some of yours voluntarily, assuming that they don't have their own $150k chunks to attack.

What are your skills? It's not uncommon for a sr-level programmer with in-demand skills to be able to pull in $100k+ doing freelance or contract work, and even with other expenses, you can probably have this $150k taken care of in 3-4 years.

Also, have you talked to your creditors to see if any will forgive some of the debt? They may 1099 you for the difference in some cases, but paying tax on, say, $10k of forgiven debt is different than having to pay $10k.

I feel for you - I've been in that situation, just without so many zeros. :/

Can you raise investment or sell the company outright ? - if you've got millions of users then it might be viable route.

You firstly need to realize that mood is like the weather, it's never permanent.

You have some real practical problems to deal with, but no more than lots of people, no more than lots of people who you admire have dealt with.

You need to talk to the organisations you owe money to, you need to negotiate a payment plan you can actually afford.

You need to listen to this interview with Rand Fishkin, http://mixergy.com/seomoz-rand-fishkin-interview/ in which he talks about being in debt.

Look yourself in the mirror, are you really exhausted and out of ideas ? I don't think so, I think you're just getting started.

I wasn't being sarcastic. It is just not an easily monitizable space.

It is $150 total, but the way credit was signed up, almost all of it is guaranteed by me. I am looking into consolidation (and partial forgiveness), that might make it entirely mine and that might just be worth it. Take full responsibility and take full action.