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Trucking startup Convoy closes operations with no buyer

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Re: Trucking startup Convoy closes operations with no buyer

#301

Post by busterarm »

omginternets wrote: post #279
busterarm wrote: post #269

Earlier quoted context omitted.

Your series A startup continues to operate and offers a severance that isn't even required for the purposes of reputation management. They want to be able to hire good people tomorrow so they pay you severance today. The company in question here is dead. There is no more money coming in and no business to operate.

I understand what you're saying, but I think you may be missing my point, which is: Jeff Bezos's reputation is damaged by this. I will not work for anything he touches because I don't think he's behaving decently.

So he already put up and risked his personal money to even start this venture and it failed and you're saying he should continue to lose money on a failed investment even though these people will receive unemployment insurance that his business already paid tax into to fund?

Startups are risky and even though you work at one, I don't think they're for you. There's plenty of other union labor jobs with pensions out there that seem to be more your speed. Your position isn't a reasonable one.

You want to have your cake and eat it to. All the rewards of being an early stage startup employee without any of the risk or skin in the game.

Re: Trucking startup Convoy closes operations with no buyer

#302

Post by busterarm »

lelandbatey wrote: post #213
netbioserror wrote: post #187

Earlier quoted context omitted.

Boilerplate vapid moralizing nonsense. Are you assuming there's some magic stockpile of millions upon millions hiding somewhere that could be used to sever all of these people? You've already been told this is fantastically unrealistic for a startup bankruptcy. Unless you can suggest where to find the funds, you need a reality check.

There's been some pretty clear suggestions up thread on where to find the funds, namely "several months ago in the past". To be more clear: The business (Convoy) should have shut down in e.g. August of 2023 when it was clear that they still had enough cash to pay out severance and still cover the expenses of winding down the business. They did not take this option, choosing to instead risk it all that they could brin…

Everyone knew the writing was on the wall 4 months ago when they were shopping for buyers and laid off 1000 people.

The fact that they continued to operate for 4 months with no new investment is the same as if they had shut things down then and offered severance.

There was no gamble here like your comment implies.

Re: Trucking startup Convoy closes operations with no buyer

#303

Post by JumpCrisscross »

sangnoir wrote: post #293
JumpCrisscross wrote: post #260

Earlier quoted context omitted.

> It's swell when people gamble with employees well-being on the miniscule odds of a miracle You don't know the odds ex ante ! Again, they would have been roundly criticized if they'd prioritized severance (which means more for the highly paid) and preferred stockholders over their rank-and-file common holders. > Unemployment benefits don't come anywhere close to tech salaries! They take time to process You're arguin…

> You don't know the odds ex ante! No, you can simply choose your cut off time for a hail-mary at 2 months of runway, rather than 0 months of runway. Leaders don't have to rundown the clock (and bank balance) to 0 - they may choose to, like they did in this instance. > You're arguing for special treatment of well-paid tech workers over e.g. truck drivers Again, no. I'm arguing against your suggestion that the Convoy…

> you simply choosing your cut off time for a hail-mary at 2 months of runway

I'm saying it isn't that simple to project runway in some businesses.

> arguing against your suggestion that the employees without severance are going to be alright because they have severance

Sorry, we agree on this. This will suck for everyone involved. If it was preventable, that's on management.

> plenty if startups led by people who do right by their employees

When push comes to shove, constraints apply. Shutting down a start-up with cash in the bank isn't something that happens without a fight. There will be lawyers, possibly lawsuits, and delays. Convoy had $100+ million in debt; the employees would have had to fight claims of wrongful conveyance.

Put another another way: the CEO paid employees another few months' salary instead of handing that cash to its lenders.

Re: Trucking startup Convoy closes operations with no buyer

#305

Post by mrcwinn »

dboreham wrote: post #192
benced wrote: post #72

Earlier quoted context omitted.

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 a company is shutting down, it obviously can't provide severance Not really true. The company is owned by its shareholders, and they may choose to use funds belonging to the company (after paying outstanding obligations) to pay severance, or they may divide the funds among themselves. If there are no funds, they can choose to invest more to pay severance. Obviously they're unlikely to want to do that, but it's n…

>choose to invest more to pay severance

Deploying capital into something that literally has no return just doesn't make sense. You're also ignoring the reality that most capital comes in at the start. It doesn't come in at the end. That's an irrational investment. Would you buy a house that's burning down in the interest of the current homeowners?

Could a company receive funds at the end? Legally, sure, maybe (maybe not given fiduciary duties to LPs).

Investors would have to say to their limited partners: we're going to take your money, and hand it over to employees, and those employees will do no work for us and the company is shutting down anyway. That's a very ineffective use of capital and those types of decisions are worse in the end for the economy, I would argue, which does impact everyone.

Startups are risky for investors. They're risky for employees too. I think a better solution might be to bolster unemployment insurance. After all, investors often have downside protection (usually in the form of preferred shares or preferences). Employees need downside protection too. But let's not perverse how capital should work.

Re: Trucking startup Convoy closes operations with no buyer

#306

Post by jabroni_salad »

dieselgate wrote: post #10
sputknick wrote: post #6

start-up idea if anyone is bored: disrupt car shipping. When I moved from Seattle to Raleigh shipping my car was BY FAR the biggest headache. It's a 20th century business where you have to call people, who will bid for you, and you have no idea if your bid is accepted. Agents will promise a low price to get your business, then tell you a week later that bid was too low, you need to double it. I eventually just gave u…

Don't have experience with trans-continental vehicle transport but as part of an old job one task I had was "drive this truck from Utah to North Carolina.. work there for a few weeks then drive this van back to Utah". Certainly cheaper than designated shippers for a company... As a consumer I'd assume there are hotshot truckers/services that would be used for this? People have mentioned similar "agent oriented" exper…

'Dealer trades' are pretty common now. If you want a very specific car it might be the only way to get it these days since the used market is so anemic.

My local dealer somehow got a lead that I want a very specific year and trim GTI and twice now they have offered to bring one in for me.

Re: Trucking startup Convoy closes operations with no buyer

#307

Post by mhandley »

bart_spoon wrote: post #127
adastra22 wrote: post #99

Earlier quoted context omitted.

A startup will never survive long enough to close the next round with that logic.

Of course they will. What is the magic that separates success from failure that apparently only magically appears within the last 4 weeks with operating capital in the bank? Move your time tables up by 4-8 weeks, including funding raises and closing operations, and none of this is an issue.

Exactly that magic happened with our startup last year.

Re: Trucking startup Convoy closes operations with no buyer

#308

Post by Larrikin »

busterarm wrote: post #301
omginternets wrote: post #279

Earlier quoted context omitted.

I understand what you're saying, but I think you may be missing my point, which is: Jeff Bezos's reputation is damaged by this. I will not work for anything he touches because I don't think he's behaving decently.

So he already put up and risked his personal money to even start this venture and it failed and you're saying he should continue to lose money on a failed investment even though these people will receive unemployment insurance that his business already paid tax into to fund? Startups are risky and even though you work at one, I don't think they're for you. There's plenty of other union labor jobs with pensions out th…

Why is it a requirement to have "skin in the game"? What does that even mean?

The risk to an employee at a company that got $250 million should only be accepting options that could be worthless in lieu of a portion of salary. There absolutely does not need to be any risk of losing healthcare, lacking severance, or any other loss of benefits. Founders want you to believe this but it doesn't have to be true.

Re: Trucking startup Convoy closes operations with no buyer

#309

Post by busterarm »

Larrikin wrote: post #308
busterarm wrote: post #301

Earlier quoted context omitted.

So he already put up and risked his personal money to even start this venture and it failed and you're saying he should continue to lose money on a failed investment even though these people will receive unemployment insurance that his business already paid tax into to fund? Startups are risky and even though you work at one, I don't think they're for you. There's plenty of other union labor jobs with pensions out th…

Why is it a requirement to have "skin in the game"? What does that even mean? The risk to an employee at a company that got $250 million should only be accepting options that could be worthless in lieu of a portion of salary. There absolutely does not need to be any risk of losing healthcare, lacking severance, or any other loss of benefits. Founders want you to believe this but it doesn't have to be true.

The risk of joining a venture backed startup is that no new money comes in and there is no exit and you are out of business in a matter of weeks, like what happened here.

This is constantly looming over your head and used to be something understood by startup employees before the era of zero interest free money and "startups are kewl".

Any money raised got spent, otherwise they didn't need to raise it.

The trade off to take on the risk of being underpaid and possibly soon-to-be-unemployed by a startup are the potential equity payoff, the work environment and the human-networking. And it's usually worth it because you're buoyed by the local startup community and the high chance you get another job with people you know tomorrow if things don't work out.

The problem here is that our industry is flooded with the types of people who would otherwise have become lawyers or finance people because they chase comfort and status as opposed to a desire to work on cool shit with cool people. It kind of makes me hope these conditions extend for a while to weed out the people who don't belong and we can get things back to relatively-normal.

Re: Trucking startup Convoy closes operations with no buyer

#310

Post by omginternets »

busterarm wrote: post #301
omginternets wrote: post #279

Earlier quoted context omitted.

I understand what you're saying, but I think you may be missing my point, which is: Jeff Bezos's reputation is damaged by this. I will not work for anything he touches because I don't think he's behaving decently.

So he already put up and risked his personal money to even start this venture and it failed and you're saying he should continue to lose money on a failed investment even though these people will receive unemployment insurance that his business already paid tax into to fund? Startups are risky and even though you work at one, I don't think they're for you. There's plenty of other union labor jobs with pensions out th…

>Startups are risky and even though you work at one, I don't think they're for you.

Fortunately, there are many startups whose leadership is prosocial enough to try to offset some of the risk to its employees.

Since you seem like a Chicago School kinda guy, I'll put it in terms I think you can understand: employment is a market, and I am fortunate enough to have a optionality. It's bizarre that you fail to recognize that; it's pretty critical to your own analysis.

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