[HN Gopher] Bolt Financial's loans come due
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Bolt Financial's loans come due
Author : prostoalex
Score : 198 points
Date : 2022-05-26 15:06 UTC (7 hours ago)
(HTM) web link (www.axios.com)
(TXT) w3m dump (www.axios.com)
| sydthrowaway wrote:
| I don't get the value of this company. How can fellow SWEs who
| learnt about kernels, networks and hardware (among other
| incredibly complicated works) get excited about ONE CLICK
| CHECKOUT?
|
| Maybe this is the JS boot camp effect.
| dntrkv wrote:
| Of all the services to complain about, one-click checkout
| should be near the bottom of the list.
|
| For the users, it provides a great UX and prevents the need to
| give your personal/CC info to every random site that you wish
| to purchase from.
|
| For the business, it can significantly improve conversion,
| reduce fraud, and reduce eng time for payment integration.
| _fat_santa wrote:
| Engineering vs Product. You can have very exciting engineering
| behind what is otherwise a very boring product. I'm currently
| leading a React Native app team and from an engineering
| perspective, it's very exciting. Bleeding edge everything,
| fabric, hermes, beta and alpha versions of multiple devtools,
| etc. From a product perspective it could not be more boring,
| we're building an app to help insurance salespeople track their
| sales.
|
| And of course there's always the money, for the right price
| I'll work on whatever you want me too. If someone offered me a
| job building Windows Vista widgets for $1M/yr, you can bet I
| will take the job and be very happy.
| shalltell wrote:
| How can you not get excited or at least, curiously so, to see
| how they solve this "problem"?
|
| How is bolt going to be better or different than PayPal
| checkout or the amazing Apple Pay checkout (I literally use
| Safari for this).
|
| PayPal checkout kinda sucks (the UX was bad when I used it
| years ago, not sure how its improved). Apple Pay is way better
| on UX, but can only be used in specific cases.
|
| Simplifying something complex that the user uses as a one-click
| can/is exciting. I don't think Bolt is the solution though.
| automatic6131 wrote:
| I was just about to make this point. How does "one click
| checkout" become worth $11B?
|
| (massive) Capital misallocation, i'd imagine
| jakelazaroff wrote:
| According to a comment on another thread [1], their annual
| revenue is $40M. That's a valuation of 275x revenue. And they
| were seeking to raise _another_ $400M at a $14B valuation [2]
| -- 350x annual revenue! Truly mind boggling.
|
| [1] https://news.ycombinator.com/item?id=31510453
|
| [2] https://www.theinformation.com/articles/bolt-seeks-
| valuation...
| seibelj wrote:
| I also wonder if that revenue is just the payments they
| process. If so then true revenue is probably ~2.5% of that.
| jakelazaroff wrote:
| As shady as this company is, I would honestly be shocked
| if they counted the full value of the payment processed
| as revenue.
| [deleted]
| dghlsakjg wrote:
| Also isn't this in somewhat direct competition with Apple
| Pay, Google Pay, Amazon Pay and Stripe?
|
| I would not want to bet against any one of those companies,
| let alone ALL of them.
| icelancer wrote:
| Correct, and you didn't even name their toughest competitor
| - Shopify's one-click checkout.
| dghlsakjg wrote:
| Isn't shopify one-click limited to stores on their
| platform?
| notesinthefield wrote:
| Id be thrilled about the bootcamp scene if Bolt were a direct
| result of it. But I doubt many are excited any more than
| motivated to do better.
| ceejayoz wrote:
| I do; I've found the reduced friction of Apple Pay and
| Shopify's ShopPay offerings to be very, very nice from a user
| perspective.
|
| What I don't get is thinking it's so massively compelling as a
| _competitor_ to these existing systems.
| eatonphil wrote:
| See also: the HN comment about Dropbox.
| hotpotamus wrote:
| How did an office sub-leasing company (Wework) become a tech
| company that was supposed to change they way we live and work
| and create the first trillionaire, or whatever craziness they
| cooked up?
|
| From what I've seen, you find a charismatic dude with a good
| story that they probably even believe themselves, and another
| dude with a lot of money who wants to make that into even more
| money and you get them together. Then you find more believers.
|
| It's more akin to religion than anything else, but employment
| seems like the new religion for many - it's certainly an
| integral part of identity.
| 8ytecoder wrote:
| How did a home rental company or a media rental company
| become a tech company?
| actusual wrote:
| I'm confused about what you are trying to imply with your
| question.
|
| Either you are making an argument for "Netflix/AirBnB are
| considered tech companies, so why not WeWork?". Or you are
| saying that Netflix/AirBnB aren't actually tech companies?
| Or are you implying that given enough time, WeWork would
| have become a tech company, despite its non-technical
| beginnings?
|
| To compare AirBnB/Netflix to WeWork from a technology
| standpoint doesn't make any sense IMO.
| TuringNYC wrote:
| Checkout is a problem that requires low latency, high
| reliability, and difficult decisions about fraud to be decided
| at the moment. These are hard problems which are interesting to
| many engineers.
|
| It is also a high-value problem, and thus there is compensation
| to support the hard work.
| Invictus0 wrote:
| To be clear, your question is asking why smart people get
| excited about simple things that provide a lot of value?
| axg11 wrote:
| Then you probably don't understand the value of any big tech
| company? All of them are premised on ideas that are trivial on
| the surface but involve difficult engineering challenges at
| scale.
| pevey wrote:
| And it's a one-click checkout that they apparently don't event
| WANT to be widely adopted. There is no pricing info on their
| web site. It is a "call us" type of sales pipeline. I pointed
| this out in another thread yesterday, and some people responded
| that this is fine because it is geared toward enterprise. But
| it's really not fine. It turns a lot of companies away, even
| somewhat large one. And the nature of the product is that they
| want network effects. They want it to be widely adopted. Trying
| to do that from the largest companies down was a poor strategy.
| The early adopters will be the mid-size companies with involved
| owner willing to try something new. Then the enterprise sheep
| and time-crunched small businesses will follow, after they see
| others using it. But a meaningful portion of mid-sized
| companies who are interested get lost in the very first step of
| the funnel, when they get to the site and can't find even basic
| information about how much it would cost.
|
| Compare this to Stripe (which I currently use at 2 different
| companies in 2 different industries) which manages to be very
| transparent about all pricing and still have an enterprise
| sales channel that can make larger deals with discounts.
| rubiquity wrote:
| I'm in no way defending Bolt, but your comment exudes snobbery
| as well as ignorance about what should drive a company's
| valuation. There are many incredible software engineers that
| care far more about the problem at hand being solved than
| whether the technical solution strokes their intellectual ego
| or not. This type of punching down at other software developers
| really isn't good.
| icelancer wrote:
| >> How can fellow SWEs who learnt about kernels, networks and
| hardware (among other incredibly complicated works) get excited
| about ONE CLICK CHECKOUT?
|
| I'd be willing to bet like 80-90% of SWEs are just people who
| write code 9-5, have little passion for the job, and just
| collect paychecks like most people in America. HN and Slashdot
| and so forth provide a very skewed view on our profession.
|
| So when Bolt offers people over-market wages for skills writing
| JS/PHP and some basic database stuff... a four day work week...
| strong culture of "doing enough" (aka Fried's mantra at
| Basecamp), why not take it? It's just a job to them.
| Apocryphon wrote:
| I had a former coworker who has a doctorate in physics with
| an emphasis in nuclear engineering, then a masters in CS. She
| ended up coding Rails at a startup because it paid better.
| The market demands its CRUD.
| walleeee wrote:
| hopefully the dip we're toppling into will do a number on
| this kind of incentive
| bpicolo wrote:
| There are a lot of product-minded engineers out there (user-
| facing outcomes focused). There are also a lot of engineers who
| enjoy the engineering decisions and challenges at particular
| stages of a company's growth. Both (and many others) are good
| and healthy mindsets.
|
| You don't have to be a kernel hacker to be a good or motivated
| engineer.
| FollowingTheDao wrote:
| What you are experiencing is the cognitive dissonance upon
| realizing that the last 14 years was nothing but a financial
| mirage.
|
| It is all unraveling now. No one was excited about "one click
| checkout". They were excited about the ROI.
| pjc50 wrote:
| That was the original Amazon "one click" patent!
|
| It's not the fellow SWEs that care, it's the observation that
| every step removed from the checkout flow increases conversions
| and therefore revenue.
| aluva wrote:
| There is some truth to this, not the job for everyone. I
| personally know the current CEO and I was surprised when he
| joined the company as CTO. As far as I know CTO at the very
| least should be familiar with latest and greatest technology.
| ilamont wrote:
| _Bolt Financial yesterday laid off one-third of its workforce,
| just months after raising $355 million in VC funding at nearly an
| $11 billion valuation._
|
| Serious question: Does this company have a future? Does it have
| any value, either as a profit-generating venture or sold to an
| acquiring company?
| tomatowurst wrote:
| This type of gross negligence and incompetence from Ryan really
| makes me doubt his twitter claims about YC, Sequoia and NYT.
|
| It's starting to make sense that he did to shift the blame and
| deflect.
|
| Having said that I don't think this is going to play out well for
| him. It was a huge mistake to get half of your staff to take on
| personal debt for stock options that mount to nothing.
| ldjkfkdsjnv wrote:
| Yeah the picture is getting clearer. When he made those posts,
| bolt was failing and he knew it. Those were frustrations coming
| out. He got pushed out and then not long after the layoffs
| begin.
| lumost wrote:
| The tax benefits of options over RSUs are _vastly_ overstated
| relative to the risks. At the end of the day, you 're going to
| save ~15% on the total exercise through options compared to RSUs.
| That's 15% of what for many people may be a 5-10 year investment
| horizon.
|
| The risk you take on as an employee with those options is _much_
| greater than 15%. If you have used loans to purchase the options,
| you have a substantial risk of being underwater.
|
| It's time we callout options for what they are, a way for
| companies to protect their equity pool while being able to sell a
| story that the options are going to shoot through the moon.
| renewiltord wrote:
| So you grant stock and that's taxed at grant or you grant RSUs
| that convert at vest and are taxed at vest. But the stock is
| not liquid. How are you going to pay the tax. At least, with
| options you can just choose to sit on them. One of my friends
| walked away from an options grant and I exercised only when I
| wanted to. No tax implication till exercise. That's a big
| advantage.
|
| Early exercise is a big play. You do it if you're super early
| and super confident. You don't have to. Pretty traditional if
| you're early enough since it's cheap.
| lumost wrote:
| RSUs are only taxed when the company is liquid, not when they
| are vested (which is one and the same post IPO).
|
| So the tax free options are really just locking in long term
| cap gains. Of course the con is that it's not actual
| compensation as the stroke will be equal to the present
| valuation.
| smol_pkg wrote:
| I remember interviewing with them about 2-3 years ago. Everyone
| seemed very enthused, but no one was able to clearly articulate
| for me what it was that made their product/offerings different.
|
| Glad I dodged that bullet
| muh_gradle wrote:
| I interviewed for them 6 months ago. At the time I was super
| sad that I failed my system design interview, which is what
| killed my chances. But man oh man am I glad now.
| [deleted]
| Apocryphon wrote:
| Kind of a shame that yet another one of the few startups
| pushing for a four day work week turns out to be run by
| incompetents (Treehouse), and another founder who challenges
| the VC establishment turns out to be a two-faced charlatan
| (Basecamp).
| aluva wrote:
| 4 day week is simply a PR effort. I have been following the
| company on LinkedIn and even the current CEO put out "words
| of wisdom" and he likes them himself.. weird
| planarhobbit wrote:
| Not to derail this thread but what's two faced and charlatan
| about JF/DHH? Or are you referring to someone else?
| Kindra wrote:
| Pretty sure this is referring to the situation last year:
| https://news.ycombinator.com/item?id=27000945
| sillysaurusx wrote:
| Seconded. It's surprising to hear Basecamp referred to in
| such a manner. Did something happen?
| Apocryphon wrote:
| The whole brouhaha that led to a mass exodus. I don't
| know the specifics, but to alienate such a substantial
| amount of a workforce after decades of pontificating on
| the proper way to build company culture shows that the
| wisdom they were hocking ain't what it's cracked up to
| be.
| themanmaran wrote:
| Same here! I just looked back through my emails to see if it
| was the same "Bolt" I remembered.
|
| I always imagined it being a much smaller startup, not an $11B
| valuation. And it seems the market has backed me up on that.
| nr2x wrote:
| ceo gives off Jim Jones vibes.
| bogomipz wrote:
| Indeed. Someone linked this Forbes profile of him in a post
| yesterday:
|
| https://www.forbes.com/sites/stevenbertoni/2022/04/04/meet-t.
| ..
| Doctor_Fegg wrote:
| Wow. This is priceless. A longform recap of the infamous
| Dave Morin interview.
|
| > After sunset, he avoids electric lights and screens
| because they disrupt his sleep. Instead, he lights candles
| and plays a buffalo-skin drum (he made it himself with the
| help of a local indigenous tribe) to wind down before bed.
| FireBeyond wrote:
| Hah, yes. Every so often I still read this for a laugh:
|
| https://jesuschristsiliconvalley-
| blog.tumblr.com/post/465392...
|
| But yeah, oh boy, this guy took Dave Morin and said "Him.
| He's my role model."
| rychco wrote:
| This looks like a parody straight out of the show Silicon
| Valley.
| bombcar wrote:
| > A Bolt spokesperson says that only a "single digit" number of
| laid-off employees took out the loans, despite more than 200
| people losing their jobs, and that the aggregate amount was below
| $200,000. Moreover, she says the company plans to "work with"
| those individuals.
|
| If the amount was less than $200k, which is about the salary for
| a single employee these days, Bolt should just have annulled them
| entirely. The PR alone would be worth more than the $200k.
| pevey wrote:
| But if they did that, it would set a precedent that is going to
| come back to bite them when they have to let the rest of the
| staff go eventually.
| [deleted]
| bhouston wrote:
| I am not sure that is fair -- what if someone decided to buy
| out their vested shares with their own money? They would be
| screwed while those who borrowed from Bolt wouldn't be. It is
| just generally problematic.
| bombcar wrote:
| Sometimes being nice ends up being unfair. Given the "talk to
| us we'll work something out" part of the message I bet that's
| what Bolt is basically doing - in the cases where people are
| now "screwed" they're going to arrange for a grant or
| something to make people whole.
| sfblah wrote:
| Same problem with the student loan forgiveness being pushed
| in the US currently. My cynical take is that they'd just do
| the forgiveness and refuse to talk about the people in the
| situation you described.
| whywhywhywhy wrote:
| Most of the attitude I've seen to that situation is "tough
| luck, life isn't fair"... seemingly oblivious to their
| original argument for forgiveness being it's unfair they're
| saddled with that debt.
| sokoloff wrote:
| There's no shortage of single-ply thinking in the world
| of politics.
| rootusrootus wrote:
| Politics is a numbers game, though, not a moral one.
| There are ~258M adults in the US. ~43M of them have
| student loans. Already you can see a problem. 17% is
| nowhere near a majority. If you are looking to make
| people happy and vote for you, targeting a 17%
| demographic is not an ideal strategy to begin with.
|
| But some amount of the remaining 83% had student loans
| and paid them off. Comments on HN and Reddit
| notwithstanding, a non-trivial fraction of those will be
| put off by a decision to forgive current student loans.
|
| Some other amount of people, probably a majority, never
| went to college to begin with. From their perspective,
| you just gave free money to a minority of people who were
| already privileged to begin with, by even being able to
| go to college at any price.
|
| This is not how you win elections, and politicians
| primarily exist to win elections. It is entirely possible
| that forgiving student loans would result in a net-
| negative change in votes in the next election, and maybe
| for a while after that.
|
| At the very least they need to fix the underlying problem
| before creating such a moral hazard, or the next round
| will be much bigger. If they really want to buy votes
| this way, it would probably be more effective to just
| give yet another stimulus -- a nice, big one -- to every
| voter in the country.
| onlyrealcuzzo wrote:
| I am willing to bet no one did this.
| gumby wrote:
| Procedurally: It's been fairly common at early stages of
| startups I've run but the amounts have always been so small
| (few thousand $) that it's not really commensurate. I also
| always put early exercise in the SOP (you can exercise
| immediately to start the LTCG period, and vesting just
| works in reverse: company can buy the shares back, and a
| fraction of that right lapses every month). This is part of
| the potential upside of working for an early stage startup.
|
| I agree when it's 10s of thousands or more the optionality
| isn't worth it for almost anyone. And it's hard to imagine
| borrowing to exercise could _ever_ be worth it.
|
| I've never encouraged or discouraged any employee from
| making an exercise decision (I don't want to get the
| liability of giving tax or investment advice). I don't even
| encourage them to file 83(b) except that when I explain why
| it's a pain _for the company_ if they don 't do so,
| everyone has figured it out immediately :-).
| renewiltord wrote:
| Because the strike was high? Traditionally, it's what you
| do at a startup if you're early stage.
| fragmede wrote:
| Why not? Greed is universal and it's a chance to buy in for
| pennies on the dollar. We don't know their strike price or
| 409a or any of the other relevant details.
| JumpCrisscross wrote:
| > _Bolt should just have annulled them entirely_
|
| These loans were made cashlessly as part of an early option
| exercise. That is steeped deeply in the internal revenue code.
| The forgiven principal would be at the very least income. Then
| the tax benefits from the early exercise would retroactively
| apply with penalties and interest. All of this assuming the IRS
| doesn't view the move as a heads I win (if the company does
| well, a cashless loan produces early exercise tax benefits)
| tails you lose (if the company does badly, the loan is forgiven
| and there is no downside to the dodge).
|
| I'm somewhat blown away by this whole thing. Leverage to
| finance an already-leveraged derivatives position on illiquid
| stock. From the issuer of said stock. Who is also the
| borrower's employee. That's both risky and dodgy! Bolt
| positions the "below $200,000" sum as a win. I don't see it
| that way. That's below the lower bound of the accredited
| investor income test. The people taking out these loans by
| legal definition couldn't afford the risk. Yet Bolt doubled
| down and gave them leverage?
| slcjordan wrote:
| Perhaps they plan to lay off a lot more of those employees in
| the next round and they want to get the process figured out
| early?
| blinded wrote:
| or they use the restructuring as a valid reason to do a
| layoff and get rid of "dead weight"
| onlyrealcuzzo wrote:
| This is sort of similar to what Evergrande was doing with
| executives, right?
|
| IIUC, Evergrande strongly "encouraged" execs to take loans
| (secured against their income - which was considerable) to
| buy Evergrande "investment products".
|
| Obviously, this was just a way to pay employees with their
| loan. If things blew up - the employee is completely screwed.
| If things don't blow up (which seems unlikely when an
| employer has reached this level of desperation) - then it's
| still not clear it was worth the risk premium to the
| employee.
|
| This literally feels like something from a dystopian novel -
| where you take out loans to get your salary - and you only
| actually make money if your company grows 10x in one year -
| and even in that case your benefit is slim - while the VCs
| and founders walk off with 85% of the gains.
|
| Hardly anyone understands finance - and most people
| underestimate how greedy some people can be. I feel like
| there would be no end to suckers who would fall for this
| trap.
| rangersanger wrote:
| >this was just a way to pay employees with their loan
|
| This feels like a more complex, insidious version of
| company scrip. At the end of the day, you're getting paid
| in fake company money that's worthless if they go belly up.
| onlyrealcuzzo wrote:
| It is not worthless! That's typical startup equity
| (common stock for employees at least).
|
| The whole point is you're in debt (against worthless
| equity). It's negative worth!
| [deleted]
| JumpCrisscross wrote:
| > _where you take out loans get your salary - and you only
| actually make money if your company grows 10x in one year -
| and even in that case your benefit is slim - while the VCs
| and founders walk off with 85% of the gains_
|
| Better: the VCs own stock with liquidation preference over
| the common stock they loaned you money to buy. If there's
| venture debt, they are also part of the estate that will be
| paid by those loans if the company goes bankrupt.
|
| This all smells. Especially given, to my knowledge, Bolt
| didn't let even its employees take liquidity in their
| shares through traditional channels.
| toomuchtodo wrote:
| Can the SEC pursue Bolt for this?
| berberous wrote:
| For what? This thread is full of misunderstandings. What
| is it you think Bolt did that the SEC should pursue them
| for? If it's alleged they fraudulently hid risks, etc.,
| it's one thing, but so far all that seems to have
| occurred is they offered something that has pros/cons,
| disclosed risks, half wanted to take the risk for the
| pros, and in hindsight, perhaps it was a bad deal since
| valuations are tanking industry wide.
| JumpCrisscross wrote:
| > _what is it you think Bolt did that the SEC should
| pursue them for?_
|
| Bolt offered, with multiple conflicts of interest, what
| are essentially margin loans to potentially
| unsophisticated borrowers. The $300 credit for a
| financial advisor the CEO tweeted about should, alone, be
| presumptive.
|
| To be clear, I don't think anyone did anything
| intentionally wrong. (Also, I learned about this
| yesterday, so there's that.) But wanton incompetence
| bordering on--perhaps crossing into--negligence, enabled
| by a Board that absolutely should have known better, can
| and should create liability.
| berberous wrote:
| What conflict of interest?
|
| The company tried to do something beneficial for its
| employees, although perhaps it was misguided. They gained
| nothing here except the marketing benefit of trying to be
| employee friendly.
|
| Margin loans are risky because you can get liquidated and
| lose your other principal. This was a cashless loan, that
| was only 50% recourse, so the only risk is that you may
| have to pay back half of what you bought the stock at if
| it ends up worthless.
|
| I don't think there was any incompetence or negligence
| here, and even if there was some incompetence, that's not
| a theory of liability.
| JumpCrisscross wrote:
| > _What conflict of interest?_
|
| Issuer is the lender is the employer. This is a mess of
| conflicts.
|
| > _company tried to do something beneficial for its
| employees, although perhaps it was misguided_
|
| I agree. (Though it ignores the stupidly simple, entirely
| common alternative: cut the loan crap and just give them
| the money.)
|
| > _was a cashless loan, that was only 50% recourse, so
| the only risk is that you may have to pay back half of
| what you bought the stock at if it ends up worthless_
|
| For that 50%, it's identical to a margin loan. We
| regulate those because lending against magic numbers that
| go up is a consistent failure mode in capital markets.
| chris11 wrote:
| Employers cannot replace financial advice from an advisor
| with a fiduciary duty. Providing general education is
| good, and so is getting them free sessions with a
| financial advisor. But I don't totally agree they should
| be liable.
|
| This was an incredibly risky program, and I don't
| understand how Bolt was valued last year. But engineers
| were potentially sitting on a life changing amount of
| money. Not exercising could have cost engineers hundreds
| of thousands in additional taxes if Bolt had a great IPO.
| They needed to get financial advice from an independent
| advisor.
| onlyrealcuzzo wrote:
| The VAST majority of employees at Bolt would not get
| life-changing amounts of money at an $11B valuation.
|
| Unfortunately, they'll probably never be able to sell
| their shares for even a fraction of that amount anyway.
|
| The first 5 engineers would be incredibly lucky if they
| got 0.1% - who knows how many of them fully vested and
| still have shares. I'm guessing less than half. There's
| MAYBE one person who _was_ looking at close to $11M.
|
| Engineers after that would be incredibly lucky to even
| get 0.01% of the company. That's $1.1M. Again - I'd be
| surprised if there's even 5 fully vested that still have
| shares.
|
| And even if they still have the shares, they'll be lucky
| to sell them at a $2B valuation - let alone $11B. So cut
| those numbers by 1/5th (or more).
|
| Bolt would've been a SCREAMING success for a startup.
| Unless you were engineer #1-5 - you'd be better off as an
| L4 at FAANG.
| fnordpiglet wrote:
| No, and not just because it's not a publicly traded
| security. They did nothing illegal. Maybe it should be
| but sadly it's not.
| JumpCrisscross wrote:
| > _it's not a publicly traded security_
|
| FYI, this is irrelevant with respect to the SEC's
| jurisdiction [1].
|
| [1] https://www.sec.gov/oiea/investor-alerts-
| bulletins/ib_privat...
| fnordpiglet wrote:
| Your link outlined that unregistered securities don't
| have oversight by the SEC and outlined how you better be
| careful what you're getting into. It didn't outline how
| the SEC regulates them beyond limits on what you can do
| with them without registering them. They wouldn't be
| generally involved in non public shares agreements.
| dhd415 wrote:
| >>I'm somewhat blown away by this whole thing. Leverage to
| finance an already-leveraged derivatives position on illiquid
| stock. From the issuer of said stock. Who is also the
| borrower's employee. That's both risky and dodgy!<<
|
| It's risky, but not necessarily dodgy. Many employers do not
| even permit early exercise and I wish more did as I could
| have substantially reduced my tax burden in some situations.
| Taking loans for early exercise is risky, but ultimately,
| we're adults who are responsible for our own decisions.
| Certainly it would be bad if Bolt misled employees into
| thinking it was a risk-less proposition, but I've not heard
| anyone claiming that.
|
| >>Bolt positions the "below $200,000" sum as a win. I don't
| see it that way. That's below the lower bound of the
| accredited investor income test. The people taking out these
| loans by legal definition couldn't afford the risk. Yet Bolt
| doubled down and gave them leverage?<<
|
| If the aggregate loan amount to laid-off employees was $200k,
| that says nothing about whether they qualified as accredited
| investors. Further, the accredited investor designation is an
| arbitrary one. It's perfectly possible to not be an
| accredited investor and still be able to afford the risk of
| early option exercise.
| mike10921 wrote:
| "Taking loans for early exercise is risky, but ultimately,
| we're adults who are responsible for our own decisions."
| Yes, agree. If the situation was reversed and these
| employees made money from their investment no one would be
| complaining.
|
| My guess is overall Bolt was actually being nice to their
| employees and allowing them to get in early on the action
| (i might be wrong but i've been in similar situations and
| usually the intent is good)
| chris11 wrote:
| Agreed. The biggest issue I have with it is only having
| 90 days to repay if you leave. I hope they company works
| with those individuals, a few people might be in some
| serious trouble. And I'm curious how much was loaned,
| it's 200k just from the people who were laid off.
|
| But I'm not sure how Bolt significantly benefit
| financially from this program. And $200k is not a ton of
| money for a unicorn. If you're an early employee at a
| unicorn you can work with 3rd parties to make more
| aggressive financial decisions.
| dhd415 wrote:
| I agree. I don't see any way that Bolt benefits from
| having outstanding loans to employees for early option
| exercise, so all this criticism of them seems misplaced.
| Say what you want about their business model, valuation,
| etc., but this looks to me like an honest attempt to help
| employees with early option exercises. Stock options are
| risky at any juncture, but I appreciate having the option
| to exercise early as the tax benefits can be substantial.
| [deleted]
| yardstick wrote:
| > These loans were made cashlessly as part of an early option
| exercise. That is steeped deeply in the internal revenue
| code. The forgiven principal would be at the very least
| income. Then the tax benefits from the early exercise would
| retroactively apply with penalties and interest.
|
| I guess then the solution would be some form of redundancy
| payment, sufficient after taxes to cover the loan. The ex-
| employee could at their discretion use the payment to cover
| the loan. Or not. This way you'd avoid IRS penalties.
| Razengan wrote:
| Can someone please ELI5 the parent comment?
| bombcar wrote:
| Stock options (sometimes?) have an exercise date. If you
| don't exercise by that date, you give up on the options.
|
| But some of them would incur a tax liability at option
| exercising (the IRS values the "gain" at "stock price -
| option exercise price" and I believe now causes mark to
| market at the exercise time?) which would need to be paid
| also.
|
| Bolt offered to loan people money to exercise their options
| (and pay the tax?). But if Bolt forgives the loan, the IRS
| will consider it as income to the loan recipient.
|
| But even then, I'd much rather have a (income tax marginal
| rate * loan amount) debt to pay than a (loan amount) one.
| throwaway92394 wrote:
| I'm more familiar with traditional retail options, but
| I'm confused.
|
| I understand why the employees would want a loan - they
| need money to buy the shares required to exercise the
| loan - and I guess they can't do it through a normal
| broker?
|
| If the employees Exercise-to-sell-to-cover or Exercise-
| to-sell they should be fine right because they would have
| closed the loan? This would explain why so many took the
| loan but so few of the layoffs were affected.
|
| Is the only issue the ones that didn't Exercise-to-sell?
| I understand that tax will need to be paid but I'm not
| sure what benefit they'd have would be?
|
| Unless, its because the capital gains + loan rate <
| income tax?
| chris11 wrote:
| It's short term capital gains vs long term.
|
| If you don't exercise and just sell short term capital
| gains tax applies.
|
| If you exercise ISOs and hold long enough you pay AMT,
| which can be refundable, and LTCG when you sell the
| shares.
| throwaway92394 wrote:
| What happens if they waive the loan? Does it count as
| LTCG + the income tax on the loan amount?
| chris11 wrote:
| I'm not sure what exactly would happen, but forgiven debt
| is usually taxable.
| s1artibartfast wrote:
| Bolt isn't public so there is no sale option.
|
| You have to pay to exercise, pay taxes, and pray for a
| sale option some future date.
| neetdeth wrote:
| > I'd much rather have a (income tax marginal rate * loan
| amount) debt to pay than a (loan amount) one.
|
| Depends on your ability to pay. In some cases a large
| debt to a corporation is far preferable to a small debt
| with the IRS.
| tootie wrote:
| This is like eating your own dog food then eating the dog.
| pbreit wrote:
| Why would employees exercise prior to departing and/or with
| no exit in sight?
| s1artibartfast wrote:
| >Why would employees exercise prior to departing and/or
| with no exit in sight?
|
| Mainly to avoid taxes if stock price goes up.
|
| If the price is $1 today and you exercise the option to buy
| stock, you pay taxes on $1.
|
| If the price goes up to $20, you pay taxes on $20.
|
| If the company fails before you can sell, you loose moeny
| in both cases. However, if you wait, you payed a lot more
| taxes on stock that is worthless.
|
| People can easily pay hundreds of thousands in taxes on
| stock that they can never sell. Also, sometimes the stock
| goes up so much that employees cant afford the tax bill to
| exercise the option, because the stock cannot be sold until
| IPO.
|
| https://secfi.com/learn/exercise-stock-options-tax-
| implicati...
|
| https://carta.com/blog/equity-101-exercising-and-taxes/
| ertemplin wrote:
| This depends on how much regular income the employee has,
| how much cash would be required to exercise the options and
| personal risk tolerance, but it could potentially be a way
| to avoid AMT tax (and instead pay long term capital gains
| tax) when the company eventually has an IPO or other exit
| and the employee decides to sell their equity.
| chris11 wrote:
| It's last year, and an employee wants to change jobs. But
| tech is sky high, they are confident about the companies
| future, and want to get the tax benefits of exercising
| before they leave.
|
| Or it's last year, and an employee wants to lock in the FMV
| for AMT before the next round/IPO.
|
| It's definitely an aggressive move, but I can understand
| why someone would exercise.
| rwhitman wrote:
| I feel like this saga is going to conclude with a
| Hulu/Netflix/HBO documentary where they end the series with an
| interview of Ryan Breslow in his jail cell.
| greatpostman wrote:
| What people don't know is the CEO Ryan Breslinlow founded the
| company that constructed the loans. He played both sides.
| fundad wrote:
| Do they think they can get people to pay money back after
| terminating their employment?
| jrochkind1 wrote:
| "get" them to? I mean, by taking them to court and getting a
| court order for a bank levy or wage garnishment if needed,
| why not? If it's a legal debt, it's not really optional.
| s_dev wrote:
| He's a founder -- NOT the CEO who is Maju Kuruvilla. Ryan might
| be CFO though so an executive.
| ldjkfkdsjnv wrote:
| He was the CEO for the majority of the time the company has
| been around
| mbesto wrote:
| His title says Chairmen. It's worse - he's _ABOVE_ the CEO.
| icelancer wrote:
| People know this, it's being posted all over the Internet.
| However, while I think Bolt is a ridiculous company - and
| borderline scammy, check my comment history for my personal
| dealings with them - I really doubt that Ryan was in a position
| to seriously profit from these cashless loans.
|
| I would guess Ryan set it up this way in compliance with IRS
| regulations and on advice of his internal attorneys and
| financial experts.
| csours wrote:
| My understanding is that stock grants to employees are no longer
| tax advantaged and that's one reason they went away. I don't have
| a deep understanding here, so if someone has a link to when this
| changed, I'd appreciate it.
|
| Was this mechanism intended to get around this tax problem and at
| the same time help out the company?
| [deleted]
| tempsy wrote:
| This is why you should early exercise and file an 83B election
| whenever possible.
|
| Personally would avoid working at any startup that is in the
| awkward middle stage and would require you to shell out six
| figures just to exercise some questionable options especially
| now. Either join a very small company in the early stages where
| the valuation is still low or join a late stage or public company
| where you vest RSUs and don't have to deal with options at all.
| dehrmann wrote:
| The gotcha with exercising early is you have less information
| about an illiquid asset. The longer you can wait, the more time
| you have to see if the company will succeed.
| tempsy wrote:
| if you leave the company you get a refund for whatever it is
| you don't vest.
|
| i feel like people who are acting like early exercise is
| money down a black hole aren't aware that if the company is
| going nowhere you will probably know that long before 4
| years, in which case if you leave you get a refund for
| unvested options. and even if you've vested shares you're
| unsure about in many cases the company will offer to buyback
| shares.
|
| worst case it's a write off against capital gains.
| gkoberger wrote:
| Sure, but this isn't realistic. Like you said, most people
| can't afford to exercise early. Even at a small company, most
| people don't have an extra $10k to gamble on a startup that may
| go nowhere.
|
| This is what Bolt was trying to solve. They did it the wrong
| way and hurt a lot of people, but they were trying to give
| people the opportunity to exercise early.
|
| The correct answer is a 10-year extended window. It's not
| perfect, and there are downsides. But it's (currently) the
| fairest way to issue stock options to employees. By the time it
| comes time to exercise, the employee will be significantly de-
| risked because they'll know how the company is doing.
| tempsy wrote:
| Define "most people". $10k maybe a lot for a new grad but
| isn't if you've worked even just a few years, especially in a
| high paying role in tech elsewhere.
| gkoberger wrote:
| If you're working at a small tech startup, you're likely
| not making a huge salary. Good, sure, but not huge. It's
| possible you left your high-paying FAANG job to be
| developer #3 at a tiny little startup, but in my experience
| this almost never happens.
|
| Also, $10k is a lot of money. Even if you have it in
| savings (and I'd agree a lot of tech people technically
| do), it's a huge gamble on an unknown startup. You're
| already gambling your time; now you're supposed to also
| gamble your money?
| tempsy wrote:
| if that's truly how you feel why would you accept an
| offer where that's how a significant percentage of your
| compensation works?
|
| these types of work environments self select for people
| who are comfortable taking on risk. no one is forcing you
| or anyone else to join.
| bradj wrote:
| People can have a variety of different comfort levels
| with different kinds of risk. You're suggesting that
| someone should consider a slightly lower salary + future
| possible earnings on options as equivalent to slightly
| lower salary + future possible earning on options - risk
| of loss on early exercise. Some people work for startups,
| some are angel investors, there is some overlap but it's
| not 1:1 and it's because those are different types of
| risk.
| dopamean wrote:
| I'm one of those "most people" right now.
|
| I make a a great wage and have savings in the bank. However
| I have a 6 month old baby at home and a wife who is taking
| time off from her career to look after our baby. I also
| left a job I was at for almost 5 years and exercised my
| options on the way out. This cost me almost $30k in cash.
| At my new job early exercising would cost me nearly $40k.
| Spending $40k to early exercise this startup's equity grant
| feels like it might be a little irresponsible. It wouldn't
| surprise me at all if other people didn't have that much
| lying around.
| tempsy wrote:
| These types of companies self select for people who are
| comfortable taking on more risk. If this is your thought
| process why would you even put yourself in a situation
| where you pick an offer from a company that offers
| options as part of your comp over RSUs or a public
| company?
|
| I don't doubt that many people have the same thought
| process, but if I decline to early exercise from a
| company that offers that option the alternative is a
| massive tax bill down the road that I didn't need to pay
| if the company does remotely well.
| dopamean wrote:
| I selected the company I'm at because they offered me the
| highest salary of all the places I was interviewing. They
| also have a product in domain I'm very familiar with and
| are a size that would allow me to have a big impact on
| the engineering org. Basically this opportunity checked
| all the boxes I set out to check when I decided to leave
| my last job.
|
| I'll vest my options here without exercising and if they
| turn into something one day that'll be nice. In the
| meantime I'll collect the nice salary I negotiated for
| myself and grow my career the way I wanted.
|
| Edit:
|
| A little clarification about my last role. I took that
| job because they were using tech I wanted to learn and
| they had a team I wanted to work with. They also offered
| me salary that was a healthy bump from where I was at at
| the time. I didn't early exercise those options back then
| because I didn't know enough about the company to justify
| plunking down the cash. After being there nearly 5 years
| I believe in the company a lot and see the exercise as a
| smart investment. I don't have that clarity yet for my
| current role and so it just doesn't make sense to me to
| early exercise.
| gwbas1c wrote:
| > The correct answer is a 10-year extended window
|
| How would that work? Very few people stay in a tech job for
| 10 years. I stayed in a software job for 9 years, until I was
| laid off, and that's extremely unusual.
| gkoberger wrote:
| Normally, the exercise window starts when you leave and
| lasts 90 days. The 10 years works the same way, except much
| longer! It has nothing to do with how long you're at the
| company (although some companies only trigger an extended
| window after you've hit X years).
|
| Here's more: https://zachholman.com/posts/fuck-your-90-day-
| exercise-windo...
| erichurkman wrote:
| Most startups offer a 90 day window to exercise after you
| leave. Some companies have extended that to longer (caveat
| being they convert to NSO grants after 90 days).
| SoftTalker wrote:
| Is it time to spin up http://fuckedcompany.com/ again?
| curuinor wrote:
| daily wtf, which is stiiiill going, was also materially part of
| that sorta thing, but they were successfully paranoid enough
| not to get lawsuit threats until it wasn't worth it anymore
| like fuckedcompany was. so sidling into the thing worked the
| last turbomega tech crash
| a4isms wrote:
| Related: "Our Incredible Journey," which focuses on
| acquisitions that involve shutting the acquired company's
| products down and leaving their customers high and dry:
|
| https://ourincrediblejourney.tumblr.com
| Gunnerhead wrote:
| No familiar with this. What was it about?
| mgbmtl wrote:
| https://en.m.wikipedia.org/wiki/Fucked_Company
|
| "a "dot-com dead pool" that chronicled troubled and failing
| companies in a unique and abrasive manner"
|
| It was a nice counter-weigh to corporate PR-speak.
| randomhodler84 wrote:
| Startup Dead Pool. Fantasy football except betting when the
| company will fail.
| subsubzero wrote:
| Boy do I hate how ISO options are treated by the IRS for startup
| employees. It puts an insane amount of risk on the employee in
| both coming up with the cash to exercise(bolt offered loans for
| this part) and then the worst part, being taxed on unrealized
| gains. The latter to me seems completely against how the rest of
| the tax code when it comes to stock based assets. And it leaves
| employees who are not well informed on these tax details in a
| possible state of financial ruin should you have a stock
| valuation jump, then exercise; then stock price goes down, hello
| bankruptcy!. Its the prime reason I would never work for any
| startup again that offers ISOs.
| bpicolo wrote:
| They ought to regulate how long employees have to purchase
| vested options after departure or termination. If you had a 10
| year window regulated, wouldn't be an issue.
|
| It would probably make good outcomes less good (companies would
| probably grant fewer options, or instead grant RSUs) but a much
| better mean?
| bpodgursky wrote:
| - If you join as an early employee, your strike price is
| minimal and this isn't a concern at all
|
| - If you want to minimize risk in return for higher taxes (call
| ~40%), just hold your ISOs and exercise-and-sell as a same-day
| sale when you're liquid (ie forgo the tax advantages of ISOs).
| There's absolutely no way for you to get screwed over if you're
| willing to take the gain as standard income.
| strikelaserclaw wrote:
| except in cases where you are let go or decide to leave.
| JumpCrisscross wrote:
| > _except in cases where you are let go or decide to leave_
|
| The IRS is only involved at the time of exercise [1][2].
| Companies are the ones making ISOs expire, versus convert
| to NSOs, three months following termination of employment.
|
| [1] https://thestartuplawblog.com/incentive-stock-options-
| post-t...
|
| [2] https://www.cooleygo.com/isos-v-nsos-whats-the-
| difference/
| rconti wrote:
| If you do your purchase and 89b election soon enough sure.
| But if the value has ramped up too much before you realize
| you should early exercise, you might (have) trigger(ed) AMT.
| s1artibartfast wrote:
| Sure, but nobody is complaining about taxes on penny options.
| They complain about a 100k tax bill for an asset that is not
| liquid and may never be worth anything.
| paisawalla wrote:
| But if you actually want to have and hold equity in a company
| you helped build, and want the most favorable tax treatment,
| you have to
|
| 1. accept compensation in ISOs, likely taking a salary hit
|
| 2. exercise, and pay AMT in the exercise year on the spread
|
| 3. hold until you can sell, but at least for 12+ months so
| you qualify for LTCG treatment
|
| So you get hit with a lower cash comp in (1) which is an
| opportunity cost. Then you have to pay taxes in (2) maybe
| well before the stock is ever liquid in any way. Then you
| still have to wait for liquidity (3).
|
| Plus normally the company does not tell you, an ordinary
| employee, when its beginning fundraising. If it did, you
| could at least time your exercise so as to minimize spread.
|
| Conversely if I want to take a bet on a public company which
| I have no relationship to, I just buy and hold. Why is it
| easier to get favorable treatment for a company I have
| nothing to do with, versus one _that I helped build?_
| [deleted]
| mbesto wrote:
| > It puts an insane amount of risk on the employee
|
| The market is what dictates this. You don't have to take a
| startup job.
|
| Facebook, Google, etc. minted hundreds of millionaires when
| they IPO'd. It's hard for me to feel bad for people who take
| those risks.
|
| I'd argue a whole lot of engineers should be much more
| judicious about joining startups and ask for more options. If
| engineers knew how to calculate startup risks better they'd
| probably know there is too much equity is concentrated to too
| few individuals (mainly founders).
| subsubzero wrote:
| you pick two out of thousands! Google IPO'd so long ago that
| the rules regarding ISOs were different back then, strike
| prices could be arbitrarily lowered to whatever value the
| company wanted, not the maximum valuation as required by law
| now.
|
| https://www.sec.gov/news/testimony/2006/ts090606cc.htm
| s1artibartfast wrote:
| The market has nothing at all to do with ISO tax policy.
|
| As OP said, it is taxing unrealized gains. It makes as much
| sense as making employees pre-pay 10 years of income tax when
| they start a job.
| dang wrote:
| Recent and related:
|
| _Bolt announces layoffs_ -
| https://news.ycombinator.com/item?id=31507599 - May 2022 (512
| comments)
| bastawhiz wrote:
| Maybe someone can clarify this for me, because I'm not sure I
| understand how this is possible: when the loans were announced,
| it was said that ~half of employees took the loan. But here, when
| 200 people were laid off, only a "single digit" number of
| employees that were let go had these loans. Even if that number
| is 9, that's like 4.5% of the laid off employees.
|
| How is that possible, except by Bolt explicitly not laying off
| employees with loans? I don't know if such a thing is illegal,
| but "you are indebted to us so we'll give you preferential
| treatment" doesn't feel _not_ illegal.
| LatteLazy wrote:
| (Not) Owing the company money isn't a protected class. Also,
| presumably they laid off newer employees who were there for the
| loans?
| czbond wrote:
| You need more facts - the loans may not be an even distribution
| across 50%; I expect loan support was skewed towards the upper
| part of the pyramid
|
| Example - some staff may not have had loans/shares (eg;
| customer support, etc) and the loans may be for senior and up
| roles who have enough shares to worry about the high taxes on
| shares.
| kaesar14 wrote:
| I don't understand though, the layoffs affected a third of
| the company and eng was involved, how could 33% of the
| workforce be laid off with over half taking loans lead to
| single digit people in this situation? Numbers don't add up
| imo.
| in_cahoots wrote:
| If the company was growing rapidly, then maybe 33% of the
| workforce hadn't vested yet?
| berberous wrote:
| Yeah, if they laid off new folks who started less than a
| year ago, none of those people would have vested. And in
| a rapidly growing company, the new hires can be a big
| portion of the company.
| umeshunni wrote:
| And are typically the mostly likely to get laid off.
| devrand wrote:
| Did they have significant growth recently? It's possible
| they're laying off mostly newer employees who may not have even
| vested yet.
| burneraccountt wrote:
| Could be simpler: the half of employees number could have been
| a lie?
| lbarrow wrote:
| This is pretty straightforward to explain without any nefarious
| things going on: * You don't need to take out a
| loan to exercise your options until you vest some options,
| which would typically take a least a year * Bolt grew
| really quickly and so had a high % of employees with low tenure
| * The layoffs disproportionally affected newer employees, which
| is extremely common and reasonable
|
| If the people laid off were mostly people hired within the last
| year who had no reason to take out the loan yet, then you'd get
| a result like what we saw.
|
| (All that said -- these loans are an absolutely terrible idea
| and I think offering them is irresponsible.)
| achow wrote:
| Doesn't this from the article clarifies that?
|
| _Maybe the layoffs were mostly of newer, unvested employees._
| dehrmann wrote:
| > "you are indebted to us so we'll give you preferential
| treatment" doesn't feel _not_ illegal.
|
| It's not on the list of protected classes in CA, and CA has at-
| will employment, so it's probably not illegal, but IANAL.
|
| Also, as others have said, we're missing important information,
| but offering the loans was obviously sketchy and sets up a bad
| incentive structure.
| Allower wrote:
| w0de0 wrote:
| This isn't a competent news article. I'm not commenting on Bolt
| Financial's unethical choices, but simply on the poor, slightly
| insulting Axios style and format.
|
| Particularly egregious is the line which begins "Yes, it's
| welcome news..." You are ostensibly the news, Axios - why are you
| telling me how to feel about yourself? Axios repeats this pattern
| frequently - their signature bulleted snippets of supposed fact
| often being little more than tweets.
|
| Also they carry obsequiously friendly reporting on Amazon
| frequently.
| hestefisk wrote:
| So the firm borrowed money to employees?
| madamelic wrote:
| My understanding is that Bolt lined up loans for employees to
| cover employees' tax burdens due to exercising their options.
|
| In simpler words: Bolt helped employees take out personally
| guaranteed loans to give Bolt money.
|
| In the loan terms, if the employee leaves for any reason, the
| employee owes Bolt the entire loan amount within 90 days of end
| of employment.
| hoofhearted wrote:
| Doesn't all this smell ENRON'ish?
| gruez wrote:
| In what sense? Searching Enron's Wikipedia article I
| couldn't find any references to employees getting loans to
| buy stock. The only way they're similar is "dubious company
| crashes and burns, employee's equity turn worthless", but
| even then the similarity is limited because Enron was a
| case of fraud and bolt isn't (at least to my knowledge).
| solatic wrote:
| A rather large number of Enron deals (where Enron
| purchased an asset) were denominated in Enron stock
| rather than in cash. Enron executives were compensated in
| stock, with additional bonuses based on the stock value.
| Everyone was happy until the stock started to dive, then
| many of the underlying deals that were denominated in
| stock reverted to cash because the stock price dropped
| too low, etc.
|
| It's Enron-ish because it's a deal that creates
| additional demand for the stock, then when the price of
| the stock rises, it's used as proof that doing deals with
| company stock is profitable to all parties, which makes
| it more enticing in the future. When the stock falls
| (always unthinkable), the rank and file are holding the
| bag.
| fnordpiglet wrote:
| Enron, Lehman, and similar had serious pressure to buy
| company stocks including making it the default for a 401k
| contribution. But afaik there was no equity financing by
| the company. That said the culture was so heavy all in
| corporate stock many, many employees lost everything.
|
| Never hold company stock. If you work there you're
| already incredibly long. Diversify.
| hoofhearted wrote:
| I was implying ENRON'ish in the sense of executives
| encouraging employees to take huge risks on over inflated
| sales numbers and the employees being left to hold the bag.
| Not in the sense of shell companies and widespread
| corporate corruption.
| Apocryphon wrote:
| It's less Enron and more like the financialization of
| everything. Companies have so much capital they start
| investing in other startups or try our harebrained schemes
| like this, rather than spending it on R&D.
| gitfan86 wrote:
| The alternative these people had was to not exercise their
| shares. Do we know when those shares expired? Could they have
| waited until an exit to buy the options?
| gruez wrote:
| > to cover employees' tax burdens due to exercising their
| options.
|
| Not just the tax burdens, the exercise price as well
| yardstick wrote:
| > Not just the tax burdens, the exercise price as well
|
| Sure, but the exercise price is effectively set by the
| taxman. If you set it too low, they'll just charge more
| tax.
|
| See https://assets.fenwick.com/legacy/FenwickDocuments/409_
| Valua...
|
| "Employees, officers, directors and consultants who receive
| stock options with exercise prices that cannot be shown to
| be at or above the reasonably-determined FMV on the date of
| grant face immediate tax on vesting at a combined federal
| and state tax rate as high as 85% or more."
|
| The game is rigged in the taxman's favour.
|
| If the tax was calculated at the exercise (or grant!) date
| but only due upon sale of the shares (or using those shares
| as collateral to loans etc), the system would be a lot
| fairer. Especially for illiquid shares in private
| companies, where it may be years until you could receive
| cold hard cash for your shares.
| xwdv wrote:
| Imagine if getting fired and immediately owing a vast sum of
| money to your employer became a common practice at most
| companies. Might lead the way to higher levels of employee
| retention and may be seen as some kind of solution to people not
| doing their jobs or doing the bare minimum just for a paycheck,
| especially in undesirable but necessary jobs.
| FollowingTheDao wrote:
| What you are describing is indentured servitude. And might I
| add that it is scary you even think this is close to a good
| idea.
| xwdv wrote:
| I'm merely analyzing ideas. You'd probably turn blanch if you
| attended some of the product development meetings that happen
| behind closed doors at my employer.
| floren wrote:
| It's disgusting as hell so yes, I wouldn't be surprised to see
| it in the next few years. Maybe when you start your new job,
| you have to pay them a $10k deposit, which will "vest" back to
| you over the next four years; quit early and it's gone!
| umeshunni wrote:
| This is/was actually a common practice in IT companies in
| India, where you have to a pay back a 'bond' if you leave
| within a year or something.
| fundad wrote:
| Imagine getting paid back by someone you just terminated. It's
| fantasy, fuck these guys.
|
| Seriously pay nothing back until you speak to a lawyer. Bolt
| will be out of business by the time the loans go into
| collection, then offer to settle for $1.
| fnordpiglet wrote:
| Sounds like precisely the opposite world I want to live in.
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