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Bolt announces layoffs

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Re: Bolt announces layoffs

#481

Post by hef19898 »

xuki wrote: post #469
jjeaff wrote: post #412

Earlier quoted context omitted.

My experience is that current investors want you to hire tons of people to shorten your runway so they can force you into another round where they can buy more shares and dilute the founders more.

That might be part of it, but also VCs are not interested in $100 mil exits, they rather you go all out and either capture the market or die trying.

I always wonder how much of the faibled 99% start-up failures are up to that attitude. Imagine to settle for 100 million exit, at maybe 2x, more often. Couldn't it be tgat VCs would ve more profitable? Serious question, bevause VCs are professionals in what they do and they definitely have a reason. A reason that totally eludes me.

Re: Bolt announces layoffs

#482

Post by kolmogorov »

ryanSrich wrote: post #467

With YC, Craft, and Sequoia all urging their portfolio companies to operate at a When you’re small, and have revenue, it might only take a handful of layoffs to get to “default alive” as a startup. But once you go beyond a series A and start dumping gasoline on every part of your business to scale faster, the risk starts to grow exponentially. These companies with hundreds of employees are insanely inefficient, but t…

What do you mean by <2x burn multiple ?

Re: Bolt announces layoffs

#483

Post by paulbjensen »

mvdwoord wrote: post #475
Patrol8394 wrote: post #349

Earlier quoted context omitted.

I worked at a startup and the CEO was obsessed with hiring at all cost. We, engineers, were all wondering what the hell these new hires were supposed to do. We did not need them. Then they explained it to me. They needed to show growth through hiring in order to raise money. I mean, I couldn’t even blame them, if that’s a criteria for VC to hand you a check, well you gotta do what you gotta do. Needless to say this s…

Interesting and funny documentary from the dot com boom era in a finish company, riot entertainment. Great watch on the insanity of VC funding and growth. https://m.youtube.com/watch?v=g0lrIi0ce5E

Haha, I have watched that documentary multiple times, it is great and deserves to be turned into a film.

Someone's earlier point about hiring as a growth indicator to VC's reminds me of the point made by the CEO in the documentary about how VCs told him he needed to have 100 employees in order to boost the value of the company, so they ended up hiring people off the street, spouses and family members.

Crazy story.

Re: Bolt announces layoffs

#484

Post by xiphias2 »

ryanSrich wrote: post #467

With YC, Craft, and Sequoia all urging their portfolio companies to operate at a When you’re small, and have revenue, it might only take a handful of layoffs to get to “default alive” as a startup. But once you go beyond a series A and start dumping gasoline on every part of your business to scale faster, the risk starts to grow exponentially. These companies with hundreds of employees are insanely inefficient, but t…

> it’ll be an end of an era

I don’t think it will, but even a 1-2 year recession is enough to destroy these companies. The leverage in / structure of the current financial system makes it extremely hard to not decrease interest rates again.

Re: Bolt announces layoffs

#485

Post by synu »

SamReidHughes wrote: post #401
synu wrote: post #394

Earlier quoted context omitted.

If you can’t afford to buy your options, but take out a personal loan to buy them, that must have been a riskier approach than just buying them if you had the cash, no? The leverage increases the personal risk at least as I understand how that works. Unless there was an agreement to forgive the loans if the options go underwater, which I haven’t seen reported here.

It depends on what your future income stream looks like. If you're a 22-24 year old software developer, getting to take on low-interest debt in an inflationary environment is a great deal. It's losing money on the stock that is the problem here.

If it requires predicting the future isn’t that by definition riskier?

The potential outcomes if you spend money you have are that you recover your money (break even), lose the money, or make a profit.

The outcomes if you take a loan are that you break even, make a profit, or acquire a debt that you by definition weren’t really able to afford in the first place (or you would have just used the resources you have to fund the exercise).

I feel sorry for anyone who was hoping they were young and had tons of upside potential, who now needs to service a loan that they will never see a corresponding asset for, who is about to face a quite difficult job market for juniors.

Re: Bolt announces layoffs

#486

Post by ryanSrich »

kolmogorov wrote: post #482
ryanSrich wrote: post #467

With YC, Craft, and Sequoia all urging their portfolio companies to operate at a When you’re small, and have revenue, it might only take a handful of layoffs to get to “default alive” as a startup. But once you go beyond a series A and start dumping gasoline on every part of your business to scale faster, the risk starts to grow exponentially. These companies with hundreds of employees are insanely inefficient, but t…

What do you mean by <2x burn multiple ?

Less than a 2x burn multiple. If you don’t know what a burn multiple is, read this → https://sacks.substack.com/p/the-burn-multiple-51a7e43cb200?...

Re: Bolt announces layoffs

#487

Post by mstipetic »

hef19898 wrote: post #481
xuki wrote: post #469

Earlier quoted context omitted.

That might be part of it, but also VCs are not interested in $100 mil exits, they rather you go all out and either capture the market or die trying.

I always wonder how much of the faibled 99% start-up failures are up to that attitude. Imagine to settle for 100 million exit, at maybe 2x, more often. Couldn't it be tgat VCs would ve more profitable? Serious question, bevause VCs are professionals in what they do and they definitely have a reason. A reason that totally eludes me.

I always thought Uber could be a nice billion plus business modernizing the taxi business and providing software to run it, but no, they had to grow so much to legally fight whole countries and upset regulations

Re: Bolt announces layoffs

#488

Post by bongoman37 »

Patrol8394 wrote: post #349
abraxas wrote: post #273

Earlier quoted context omitted.

40M in revenue for the year?! Jesus, my startup is making about half that with a good sales pipeline for this year and we are 55 employees total. We might hire additional handful this year but that's it. How do you even onboard when you double your workforce every few months?

I worked at a startup and the CEO was obsessed with hiring at all cost. We, engineers, were all wondering what the hell these new hires were supposed to do. We did not need them. Then they explained it to me. They needed to show growth through hiring in order to raise money. I mean, I couldn’t even blame them, if that’s a criteria for VC to hand you a check, well you gotta do what you gotta do. Needless to say this s…

No post body was provided.

Re: Bolt announces layoffs

#489

Post by zszugyi »

bogomipz wrote: post #257
pfarrell wrote: post #68

Earlier quoted context omitted.

"Don't spend real money on fake money." Good advice I got from colleagues at a 2000 era company who took out loans to buy their options and cover the taxes when the stock was at $50/share and then watched it drop to <$1/share while they were in a lockout window. I worked with people who had 6 figure loans they owed on for worthless stock. Took years for the stock to recover.

Why would they have taken out a loan to buy their options? If the options are vested you can just sell them and pocket the difference between your strike price and the buy offer. If the options weren't vested you can't buy them anyway and you would still have the same strike price when they did vest.

I'd guess they wanted to hold the stock for 1 year after exercise to qualify for long term capital gains, but this would likely trigger AMT. Not sure if this has been the case back in the day though.

Re: Bolt announces layoffs

#490

Post by TimJRobinson »

IG_Semmelweiss wrote: post #407
berberous wrote: post #137

Earlier quoted context omitted.

It's a cashless loan. If you have options that cost $10,000 to exercise, the company lets you pay with a promissory note (promising to pay the $10,000, plus minimal interest set at the IRS's AFR). This is effectively the same as the company loaning you $10k, and then you hand it back over to exercise, but the cash does not change hands. If you were to get a private loan, the interest would be much higher. The company…

Re: last paragraph Is it realistic for a bankruptcy trustee to come after employees that signed uo for a personal loan for shares in a company now worth zero. Is there a documented case of this happening and suceeding?

In that Twitter thread where the CEO originally announced the idea many people reported this happened in the dot-com bust. Private equity firms would buy the company and go after past employees for the loaned money.
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