In such a situation (startup with unclear financial situation, foreign country) I would demand weekly payments. And if it is more than a week late, I would just leave.
What being ripped off taught me
121–130 of 247 posts
Re: What being ripped off taught me
#122[flagged]
[deleted]
Re: What being ripped off taught me
#123> A contract is toilet paper It isn't, but you can't get blood from a stone and squeezing costs money. It sounds like the entity that the contract is with has no real assets and/or is based in a jurisdiction which is hard to enforce judgements in. That's a case where you need to get paid up-front, which is the real lesson in this article.
> That's a case where you need to get paid up-front
Or at least in very small batches and with very short due dates.
Re: What being ripped off taught me
#124Earlier quoted context omitted.
> Do not be afraid to lose business from companies that are squeamish about paying you - in fact actively avoid such companies. My boss said that the ones who have negotiated the best deals are the ones that are late paying, complain about just about every bill and will write angry letters when my boss index adjust pricing. He said it taught him to never offer a really good deal for a regular customer (ie where the u…
Where I live the phone companies do this: you can get a discount every year by calling them and saying you will change companies unless they give you a better price. They always do and the only people paying normal prices are the ones who can’t be bothered to call them every year to request the discount!
In order to make out on this at my hourly rate, I would have to cap my phone time with the company to minutes. Single digit.
It's literally just not worth it. Time is the most finite resource that we all have.
Re: What being ripped off taught me
#125Never do anything on faith or as a handshake deal. Always ensure you get paid (hint: escrow is kryptonite for weasels). Trust everyone, just not the devil inside them. Also, mandatory: https://creativemornings.com/talks/mike-monteiro--2/1
Yes! I regularly share a link to Mike's talk - I was about to post it myself before scanning the comments.
Re: What being ripped off taught me
#126Very very important to get something up front; sometimes half up front doesn't always work for long projects, but you can scope out tranches where if you dont get paid for the first section of work, you walk away.
Has saved me from wasting my time on loads of projects before.
Reading the thread, I think most of us who have worked contracts here have been burned one way or another
Re: What being ripped off taught me
#127Earlier quoted context omitted.
The company was California-based, they were offering services in China. At least, that was my read. The contractor was also in California. Honestly, this seems to be bad advice from their recovery services. Suing is 100% recommended here. There are plenty of lawyers that will work on a pro rata basis for account recovery in California. Sure, you lose a portion of your 35k; but you get more than you would have letting…
Not saying I know better but this contradicts what I heard from multiple collections companies with in-house legal - they all said suing would not be worth the ~$2,500 upfront fees and that the debtor would just vanish. The debt still exists so I'd love to think otherwise! Feel free to HMU if you have a specific lawyer/practice in mind ;
The debtor can't "vanish", they are either an individual or an entity with registered individuals attached to it. Obviously, their structure matters a little bit along with where they are incorporated. But if they are incorporated in California, their debt is 95% recoverable if they want to continue doing business in any way. As an individual you can go after garnishment and other relief. As an entity, it's similar but to their company/corporate holdings.
If they try to dissolve and create another business that operates in the same sphere/as a successor or with the same management team; the debt doesn't disappear, you just prosecute the new entity. With an added cherry of potential criminal prosecution, if they're particularly egregious about it.
People can 100% get around paying, that happens. But the judgement will remain on their record. This will make reincorporation difficult as well as just acting as a warning to future partners that do basic due diligence.
No one's saying it's easy to get the money back, but rolling over probably is the least desirable outcome (and probably why they've acted this way with so many people).
As to your collection firms, I can't speak to it. Maybe your situation is more complicated (e.g. registered entity out of state, unclear contract terms, etc) or they just don't want to go through with the hassle of doing more than they were hired to do (send nag letters and hope for easy turnover).
In the future, you can use it as a learning experience. Keep your deliverables under the small claims limit, do metered payouts, etc.
Re: What being ripped off taught me
#128Be paid or don't work. I am so deadly serious - do not continue working if your invoices are late. You don't have to be a jerk about it, just explain to your primary contact that you need to be paid and you pick up tools again when the money has arrived. BUT it is on YOU to properly negotiate reasonable payment terms. And if you don;t know or don't trust the client then require payment in advance until a stronger com…
I guarantee you that if OP said, sorry, do this or I am going home, they would have done what needed to be done. Both in terms of payment, and in terms of getting their software and hardware houses in order.
It might have involved OP getting a taxi to the airport and being chased down at the gate, but it would have worked.
And even if it didn't, they would have saved themselves enormous time, money, and stress by following through on their threats if it didn't work out.
Re: What being ripped off taught me
#129Good lessons in here, but the part about giving up on legal action because they told him they’d dissolve the entity is questionable. This is where it pays to have a good relationship with a lawyer who will be up front about your chances and the cost of legal action. The sum discussed falls into the difficult range where it could take enough hours to try to collect that you’d be worse off than where you started if the…
I don’t know this for certain, IANAL, but it seems to me if they’re threatening to dissolve the entity, that could open the owners to personal liability.
Definitely bring it up with your lawyer.
Re: What being ripped off taught me
#130[flagged]
> NEVER work for a YC founder.
I would generalize this to "don't work for someone whose ability to pay is based on a high-risk gamble".
There are certainly shady people who can pay but don't because they are greedy avaricious bastards. But there are also plenty of people who would like to pay but whose business venture fails and with it goes their funds.
In the author's story, they probably should have concluded fairly early on that a team that wildly incompetent was also unlikely to produce a product that satisfies their client. And if the client doesn't pay, no one gets paid.