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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

#401

Post by ska »

adam_arthur wrote: post #348
ska wrote: post #225

Earlier quoted context omitted.

GP said > Lot of talented folks in Seattle and beyond who'll be looking for new gigs. Which you took issue with and suggested the failure was counter evidence. That was pretty clearly about the technical team that was just let go, so that idea doesn't hold much water. Beyond that, the mere existence of failure doesn't mean that the plan wasn't reasonable; you need a lot more data to determine if the mgmt team was fun…

I was replying to your comment, and your response was much more general and invited other discussion. You should reread it if you need a refresher. Aside from that fact, how about discussing ideas rather than pedantic back and forths over he said she said? Not interested in that kind of discussion

I had addressed the wider point I thought, apologies if not clear enough. The mere existence of a failure, without other data, simply isn't good evidence for anything you have claimed, and any assertion that "it's usually X" needs pretty serious support to be taken seriously. It's a complicated area, and reducing it too much leads to oversimplification at best.

Re: Trucking startup Convoy closes operations with no buyer

#402

Post by MaxHoppersGhost »

cheriot wrote: post #352
MaxHoppersGhost wrote: post #329

Earlier quoted context omitted.

Everyone's salaries were probably high enough to skate by for a bit... it's a tech company not a burger king.

I LOL'd. Let's also remember that every tech company has middle and low wage jobs as well.

What would those be though? I work at a U.S.-based software startup with 100 employees and no one makes less than $80K. Avg cash comp is just under $200k. It’s likely Convoy had a very similar profile.

Re: Trucking startup Convoy closes operations with no buyer

#403

Post by FireBeyond »

JumpCrisscross wrote: post #391
FireBeyond wrote: post #366

Earlier quoted context omitted.

At least two ex-Convoy employees have posted in this thread saying they are "extremely unsurprised" that this happened, and could see it coming. Handwaving away things like you have doesn't add value - many of us have worked at startups, and the warning signs are common and repeated. A handwaving dismissal along the lines of "plenty of companies have turned things around at the last moment, running on fumes, so it wo…

> two ex-Convoy employees have posted in this thread saying they are "extremely unsurprised" that this happened, and could see it coming They were laying people off every few months for over a year. There is a difference, however, between a material chance of default and being completely fucked. > it would have been irresponsible for Convoy to do anything but run it it zero!" They should have put severance terms into…

> Providing employees with de novo severance after you know it's going under guarantees creditor lawsuits.

Citation needed. Providing executive suite with bonuses and parachutes does. Indeed, even law firms talk about this:

> Severance payments to “insiders” (generally defined under the Bankruptcy Code as officers, directors, persons in control of the business, and relatives of such individual(s)) could be subject to lawsuits to avoid or clawback the severance payments.

Fraudulent conveyance, there. No mention is made of creditors issuing lawsuits against rank and file employees.

Indeed, even for severance payments that were never in employment contracts, courts place them at/near the front of the line in bankruptcy proceedings, witness Toys R Us.

But I'd be very curious to see any cases where creditors have been able to block severance payments that are not to the C suite.

Re: Trucking startup Convoy closes operations with no buyer

#404

Post by thegginthesky »

hexo wrote: post #288

What was this company about?

Freight broker that wanted to use technology to automate the work of finding trucks, managing the communication between truck, shipper and facilities, and auditing the job of moving the load.

But the job is very high revenue (thousands of dollars per cargo depending on the distance) but low profit (5%-10%) in these times.

Re: Trucking startup Convoy closes operations with no buyer

#405

Post by cellis »

dicriseg wrote: post #270
vogt wrote: post #55

Earlier quoted context omitted.

>CEO said there'll be no severance or healthcare. Classy. Learning a lot about how certain people treat their employees during these last couple of admittedly insane years. Good for future reference, I guess - though not much solace now. I feel for the employees. Edit: Wow, more responses than I thought! I admit that the tone of my comment was too reactionary, but my opinion stands. I won't modify the original commen…

How did they burn that much cash in a year?

Can you add this as a top-level comment? It is a glaring and obvious question.

Re: Trucking startup Convoy closes operations with no buyer

#406

Post by singleshot_ »

toomuchtodo wrote: post #51
fourseventy wrote: post #45

Earlier quoted context omitted.

The company is shutting down because they ran out of money... where do you think this magical severance pay is going to come from?

Good management manages the treasury so those funds are available during a wind down. If you run out of runway and the bank account is empty, with nothing to provide workers who are getting term'd, you fucked up. (have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to pl…

If you run a company and you’re running out of money and you owe any secured creditors any money, and as the last act of the company, you pay all your employees a bonus so they can buy health insurance, you’ll find that in bankruptcy this might become a preferential transfer or a fraudulent transfer which will be clawed back by the creditors with priority.

Re: Trucking startup Convoy closes operations with no buyer

#407

Post by belthesar »

ghaff wrote: post #90
toomuchtodo wrote: post #51

Earlier quoted context omitted.

Good management manages the treasury so those funds are available during a wind down. If you run out of runway and the bank account is empty, with nothing to provide workers who are getting term'd, you fucked up. (have co-owned a business where we made folks whole for pay the owner skipped out on during the failure, asset acquisition, and their onboarding with us; plan ahead and you can do the right thing, fail to pl…

OTOH, I worked for a very small company during dot-bomb that cut salaries and the principals took no pay for a bit but came out the other side--for a decent number of years. Not sure I'd have been better off had they done a "Whelp. We did our best" a few months earlier. As you get larger, decisions obviously have longer runways.

There's always risk/reward evaluations that are made when in these situations. A handful of stories are being tossed around of examples where business owners ran the business to the redline, and then somehow pulled a rabbit out of a hat. These stories ignore that the significant majority of businesses fail. As an point of principal, is it better to bet on being the unicorn rarely, or to be the leader that takes responsibility for their employees consistently?

Re: Trucking startup Convoy closes operations with no buyer

#408

Post by nilram »

jahewson wrote: post #266
bdcravens wrote: post #25

Earlier quoted context omitted.

Absolutely terrible. Tiny companies NOT backed by some of the richest men in the world give more when they wind down.

I get your point but to free up cash for the employees he’d have to bail out all the other creditors first. Not a good precedent to set.

Under US bankruptcy law, cash first goes to employees, then creditors (including contractors), then owners.

Re: Trucking startup Convoy closes operations with no buyer

#409

Post by eli »

adastra22 wrote: post #115
eli wrote: post #85

Why didn’t employees get more notice? Why wasn’t WARN Act triggered?

Company shutdown != layoff.

Yes it does though? The legal entity of the company still exists, it’s just no longer conducting business or paying employees. Thats a mass layoff.

The California version of the WARN Act explicitly covers terminating business operations.

Re: Trucking startup Convoy closes operations with no buyer

#410

Post by compiler-guy »

busterarm wrote: post #317
omginternets wrote: post #310

Earlier quoted context omitted.

>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…

Fortunately most employers are waking up to the fact that they don't want to hire the types of employees who are prone to put a gun to their head. They're shitty coworkers too.

That's an odd way to describe "negotiating the best deal they can find."
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