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Bolt announces layoffs

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Re: Bolt announces layoffs

#61

Post by autokad »

88913527 wrote: post #52
nrmitchi wrote: post #33

First of all, there is no mention of what percentage of their workforce is being directly effected by this. I suspect it is not small. That aside, I fail to see this as anything other than this "company" taking advantage of the current environment to execute layoffs in a way that lets them blame "the market" rather than their own short-comings. We saw this in March 2020 as well. They overhired for the hype, and now a…

The more businesses do this, the more the hiring market becomes lemons for unicorn-type businesses. Prospective employees will wonder if they're an overhire and if question their expectations of job security.

yeah. lots of companies already froze hiring (firing through attrition). Bolt doesn't make a trend but it gets my attention.

edit: I saw on blind indicating its 15% of workforce

Re: Bolt announces layoffs

#62

Post by scarface74 »

dburn1169 wrote: post #39
scarface74 wrote: post #27

Earlier quoted context omitted.

I never cease to be amazed at how people value companies based on revenue and not profit. Revenue without profit numbers tell you nothing about how well the company is doing.

I'm not valuing my company solely by revenue, but it's easier to compare the values of startups by their revenues as a good chunk of startups are focused on growth and not profit - and thus aren't yet profitable. Will that start to change with the current macro environment? Probably. Was only trying to point out how out of wack valuations have gotten.

Investors in startups value a company based on the likelihood that they can pawn off a money losing company either to the public markets or an acquirer.

That doesn’t help now that the public market doesn’t have an appetite for companies that aren’t profitable.

So if retail investors aren’t interested in non profitable companies, there is no profit it in it for investment bankers to flip the stock at IPO to take advantage of a “pop” meaning that VCs are less interested in throwing good money after bad.

How have the former “unicorns” focused on “growth” fared in the last few years?

For instance DoorDash couldn’t make a profit during a worldwide pandemic when everyone was ordering takeout.

Re: Bolt announces layoffs

#63

Post by break_the_bank »

nklende wrote: post #36
Lapz wrote: post #2

The founder also encouraged employees to take on what was effectively personal debt at an ~11B valuation when they only did $5.2M in Q1…

I had a smaller YC company pitch me something like this as an option for my stock comp - an RSA (restricted stock agreement, or "founder's stock"), where I put up all the cash up front, paid a big income tax bill in the first year, but then upside was all capital gains. I would technically own the stock but I had to sell it back for nothing if I left before it vested. Turned out I left very early because the company…

Wow. How'd they make you pay upfront and still make you wait & vest? This makes no sense.

Re: Bolt announces layoffs

#65

Post by break_the_bank »

staunch wrote: post #47

Generous severance is the ethical test of a CEO during a layoff. It softens the blow of a layoff immeasurably to provide 4-6 months of severance. If a CEO won't do it, the remaining employees should question the CEOs ethics, and ask themselves how they will be treated in the future. And if the business literally can't afford to do it (which is rare), then everyone should question the CEO's competence. As customers, w…

Given the CEO suggested people buy the equity while taking personal loans in the last raise in February, I doubt the goodness of the severance.

Re: Bolt announces layoffs

#66

Post by JumpCrisscross »

scarface74 wrote: post #57
JumpCrisscross wrote: post #38

Earlier quoted context omitted.

> how people value companies based on revenue and not profit Profit is a closer abstraction to cash flows ( i.e. to the investor) than revenue, but it's still an abstraction. Investors looking at revenues and unit economics can sometimes--often--predict future profits and discount backwards, in the same way that a value investor can look at a company's profits and sometimes--less often, frankly--predict future cash f…

Profit isn’t an “abstraction”. If you bring in more money than you spend, it means that you don’t have to worry about a “runway”, nor do you have to worry about outside funding. How can you have a successful business that spends more money than you make?

> Profit isn’t an “abstraction”

The term profit covers a number of metrics. All of them are abstractions. The number of assumptions that go into a GAAP profit figure is uncountable. Profit on a cash basis is less wiggly, but it's still--for valuation purposes--useful only inasmuch as it is an estimate of actual cash returns on the investment.

> you bring in more money than you spend, it means that you don’t have to worry about a “runway”, nor do you have to worry about outside funding

Lots of ways for cash-flow positive businesses to be running themselves into the ground. Garden variety is off balance sheet liabilities, though people certainly

> How can you have a successful business that spends more money than you make?

Nobody argued this, not for the long term. But there are loads of situations in which losing money in the short term is the long-term savvy move. (This literally describes all investing. You send cash out when you invest.) Valuation involves estimating the value of those future earnings today.

Re: Bolt announces layoffs

#67

Post by cosmiccatnap »

I'm really tired of this "this is one of the hardest messages" cold open. You have thrown innocent people under the bus because you don't know how to balance a budget and mitigate risk. One thing none of these messages have ever done as far as I'm aware is take responsibility for their actions.

Re: Bolt announces layoffs

#68

Post by pfarrell »

upupandup wrote: post #18
Lapz wrote: post #2

The founder also encouraged employees to take on what was effectively personal debt at an ~11B valuation when they only did $5.2M in Q1…

> There IS risk to the employee; they now have a real loan outstanding and 100% personal recourse, so if the common stock becomes less than exercise price, their personal assets are on the hook https://twitter.com/theryanking/status/1493390184897032201 HOLY CRAP. How is this even legal???

"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.

Re: Bolt announces layoffs

#69

Post by unicornmama »

fdgsdfogijq wrote: post #49

Rumors going around on blind (posted by bolt employees) that over the course of a few rounds of layoffs it will be 30-50% of the total workforce. A lot of the initial layoff are software engineers. Apparently they only have 12-18 months of runway, and need to effectively double that. Current revenue is 40M. I guess this is the beginning of the tech washout. clings to large tech company job EDIT: 33% layoff today

Large technology companies won’t hesitate to layoff employees to protect their stock price.

Re: Bolt announces layoffs

#70

Post by JumpCrisscross »

nemothekid wrote: post #24
upupandup wrote: post #18

Earlier quoted context omitted.

> There IS risk to the employee; they now have a real loan outstanding and 100% personal recourse, so if the common stock becomes less than exercise price, their personal assets are on the hook https://twitter.com/theryanking/status/1493390184897032201 HOLY CRAP. How is this even legal???

I can't see why it should be illegal. People take on debt to buy assets all the time. But this is just so irresponsible and immoral; I really doubt the leadership is actually running a sustainable business; and I'm also starting to seriously doubt there was any credibility to the whole YC/Stripe boys club thing. 1. Ryan (was) the CEO, and can pressure employees to buy stock (or let them go because they aren't "commit…

> can't see why it should be illegal

Borrowing against one's shares shouldn't be illegal. Companies lining up recourse financing for their employees should.

How were the terms of the loans chosen? Who knew who was and wasn't participating? How was it ensured this wouldn't factor into personnel decisions? How were/are the people setting the strike prices of options segregated from the people setting the terms of the loans? There is too much already loaded onto the employer-employee relationship, we don't need to add lender-borrower to the damn mix.

(Side note: the $300 stipend for financial advice is laughable. You couldn't even get a lawyer to review a fraction of such an instrument for that amount, and yes, I'd put recourse loans against private shares in the risky as hell bucket which should absolutely be legally reviewed.)

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