231–240 of 639 posts
(Ex-)Convoy engineer here. No mystery as to why this happened, sudden tight market and low available capital demolished us. External reasons given in the article were the same we knew and couldn't do anything about considering that none of the M&A options materialized. Detailed the shutdown on a call at 8:30am Pacific this morning. CEO said there'll be no severance or healthcare. Lot of talented folks in Seattle and…
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Cobra is such a huge slap in the face too for most people. We know you just lost your income as of today, but do you wanna buy this health insurance plan for 3K a month?
If my understanding is correct, the idea behind cobra is to use it just-in-time for healthcare operations that are more expensive than the monthly premium, ie a $25k surgery + $15k hospital stay
(Ex-)Convoy engineer here. No mystery as to why this happened, sudden tight market and low available capital demolished us. External reasons given in the article were the same we knew and couldn't do anything about considering that none of the M&A options materialized. Detailed the shutdown on a call at 8:30am Pacific this morning. CEO said there'll be no severance or healthcare. Lot of talented folks in Seattle and…
No one else thought it important to try and get developers using our product to reduce our reliance on big players and well, here we are. My last check was paid out from the CEO's personal bank account.
Certain spaces are exciting to work in because you can clearly see a need but sometimes the stars don't align for you. I hope the Convoy team (sans leadership) lands on their feet. Q4 is the worst time to find jobs.
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If things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment.
> If things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment. This might be true, but personally I'd rather the company try to remain a going concern.
You could refuse the severance as an employee if you wish to go down swinging.
Edit: Knowing the company is doomed in a month or 2 and not employees offering severance is not a good thing yo do, in my book.
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Shutting down 3 months earlier, but everyone getting severance is an option. Let's not pretend it had to happen this way because it's a startup. They made the decision, if true, to use up every cent clinging on trying to find an exit or more runway.
The very nature of a startup, especially one funded like this, means that your whole existence is predicated on the hopes that you make it big. As such, spending your last cent to try to find a lifeline makes far more sense than calling it quits early. It's also certainly not in the interests of investors to just call things off.
Convoy knows their situation very well, and it hasn't changed for 6 months.
As investors and founders you can make the call and be responsible to your employees, maintaining a good reputation for yourself (as founders), and enabling future deal flow (as investors) or this situation where they get 0 help transitioning.
This wasn't an early stage company. They're a late stage (series D iirc?) company that was valued at 1 billion+ with 5000 employees. It's not fair to characterize this with the same risk profile as an early stage co., and the expectations here should be higher in terms of severance and help.
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> they may choose to use funds belonging to the company (after paying outstanding obligations) to pay severance If they can do this, they can pay salaries another month. Making a go/no go call at the edge is difficult. It sounds like Convoy thought it was getting a loan that didn’t come through. Put another way: if the CEO shut down the company while loan negotiations were in place, it would have zeroed out the commo…
> If they can do this, they can pay salaries another month If leadership decides to use the remaining funds on salaries rather than severance - then they should be judged on that! What good is buying one extra month for a doomed company? That month is more valuable to individual employees who can use it to look for new jobs
You don't know it's doomed. Plenty of companies have turned around while running on fumes. This is fundamental to start-ups.
> month is more valuable to individual employees who can use it to look for new jobs
Everyone who lost their jobs at Convoy is eligible for unemployment. The same unemployment most workers get when they're fired. Perhaps the discussion should be around improving this benefit for everyone?
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Ex-Convoy employee here: if a company is shutting down, it obviously can't provide severance. It's not a matter of class or not.
If things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment.
It’s nothing like a layoff. For example, imagine that you are a supplier to company A and now your contract is both unpaid and cancelled and you’re going to have to lay off some of your own staff. Do you recover the contract money from company A, to give your staff severance? Or can company A stiff you and use it to give their own staff severance? (No, they can’t.)
The worst part though is when you're in that spot you should jump ship, unfortunately, there are sunk cost fallacies involved and sometimes a fair amount of equity that makes you want to try to hold on for just one more month. Who knows, maybe a miracle will happen or a deal will be closed.
I did not appreciate in my scenario that the founder REJECTED a buy offer for what would have been a life changing amount of money for me, because he thought it was too low. We were gone less than a year later, and in the final 4 months, we didn't receive paychecks and were told if we left it'd ruin an acquisition and we'd screw all of our coworkers over. So that wasn't fun. We never got bought and were peddled around the country like prized cattle to disinterested companies that didn't want or understand our tech. Very miserable.
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When you get on a plane do you think they fuel it to run out exactly at the moment the plane stops at its final destination, and not a drop more? Don't you think that they reserve fuel for emergencies? Why shouldn't a business consider itself at 0 operating dollars but still have a full account for healthcare or equivalent severance?
It sounds like you shouldn't join a startup then. The very concept here is that you're taking some of this risk.
But a startup that raises a billion dollars and fails to set a cut-off that gets everyone out the door with their last paycheques is one that people will jump out of earlier.
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If things are dire enough to close up shop now, they probably were dire enough to close up shop 2 months ago, and you can use the cash to give your employees some runway for finding new employment.
Tesla wouldn't exist if Elon had shut down at the 2 month dire point. At least, I recall him saying they were at one point about 2 days away from bankruptcy. Not surprising though, that Elon would be in the same camp as this Convoy CEO, not likely to shed too many tears over worker concerns.