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This is me currently. Bought my options before IPO markets went bust. Gives me anxiety when i think about it. Just reading this comment made my heart rate go up :(.
I am not a finance person, but maybe you should talk to a tax attorney or tax planner. That kind of person may be able to offer some guidance on what you can do. Good luck and remember at the end of the day, it's just money and you can recover no matter what.
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very broad strokes: money is raised to be spent. each round gets you to the next, or you reach some measure of sustainability before the money runs out — layoffs like this should be expected, regardless of the amount raised, if there’s a shift in conditions that indicate raising again in 18 months isn’t going to be easy. You can burn any amount of money if you want to.
Yes, regardless of Bolt's specific circumstances, this is on point. Nobody is giving startups money to sit on it. Especially for the really big raises, a big part of the motivation is that the company has made a case for how the large amount of money is going to be deployed very quickly (with the goal of generating returns). You don't take $900M of VC funding and stretch it out over 10 years, that's not what they gav…
Depends on the economic environment. We are headed for a difficult cycle. Downsizing and doing a raise to at least partially "sit on" might be the best strategy at this moment. Money flow can go from huge to nothing faster than one might imagine.
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I'm genuinely curious. Is there any other options? By this point it's too late, right? And even if they played it safe there is always some risk.
> Is there any other options? Have a compelling product that generates revenue. Unless your workforce is 100% saturated and you don't really _need_ that many engineers, lay-offs are one step above cutting free snacks on the usefulness scale when it comes to trying to stop bleeding.
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I say the same about how Uber has thousands of engineers working on an app with 6 screens.
This link get's thrown around a lot, but here's a former Uber EM explaining why "an app with 6 screens" is misjudged statement: https://news.ycombinator.com/item?id=25376346
I worked for a retailer with >$2B in revenue across stores and 5 websites plus internal tools and we had about 100. And probably half were low cost contractors. Software practices sucked, deploys took forever, they had an ivory tower architecture crew and pie in the sky CTO and yet their digital products all worked fine and made tons of money. Why? Their products and branding were excellent.
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If it’s known it’s a single round, it’s easier for everyone remaining to not look around. When a second round breaks that trust though, all bets are off.
Leaving things to trust is not an option IMHO. Unless a company can guarantee that there won't be another round, they can always change their mind. I'm not sure if any company can give any such guarantee.
There is still a huge difference between “this is the only round of layoffs, we will grow past this” (when this is the true intent) and “that’s all for this week. We’ll be back with the next round of layoffs on Friday”
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To do a proper net-present value calculation, you need more than just revenue & profit. You also want to know growth rate, gross margin, and capital efficiency.
If a company doesn’t survive and is not profitable, there is no net present value calculation.
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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.
Short answer: greed. They didn’t want to give up any shares. To pay for the tax they owed between strike price and current market value, they should done a cashless transfer and sold off a portion to cover the taxes and then held the remaining for a year to get capital gains tax treatment. I think ultimately they didn’t think the party would end. I had some coworkers there who had sold stock when they could and were…
Greed by the taxman.
It would be a non-issue if the tax authorities collected the tax at the point those shares are converted to something else, or used as collateral to a loan. But to tax them without any ability for the employee to extract value from them - especially relevant for privately listed companies with glacially illiquid stock - is abhorrent.
But instead the taxman has to always be the first to eat the pie. Even if that pie never turned into anything real.
In the UK it is horrid- share options of any meaningful value are taxed at ~%63 (including all hidden National Insurance taxes) and it could be years before you can cash your shares, if at all.
Bolt Financial, the finops company, not Bolt the car sharing service which seems to be doing fine: > In January 2022, Bolt raised €628 million from investors led by Sequoia Capital and Fidelity Management and Research Co, taking the company's valuation to €7.4 billion
This comment should be upvoted. I suspect many people in the thread, like myself, read the whole thing thinking it's about the ride-sharing company. That would be bolt.eu, not .com.
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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'm always more interested in the low-fixed-cost software businesses like Sublime Text, Pinboard, or Hwaci (SQLite)
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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.
to be clear most VC funds are not actually able to do that.