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The Right Way to Lay People Off

Ben's Blog

outcome with no recapitalization. When a company fails to hit its financial plan so severely that it must fire the employees that it went to great time and expense to hire, it weighs heavily on the chief executive. You cannot hire an outsourcing firm like the one in the movie Up in the Air. Here’s how. Why so strict?

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Survivors

Both Sides of the Table

You find out those that have the fortitude to work out a new way forward, who can handle recapitalizations or downsizing or shutting down business lines or hiring whole new teams. Through failure you find out who the survivors are. I saw this in 2001-2003 and in 2008-2010.

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Startup Founder Agreements

blog.simeonov.com

They have voting rights which may entitle them to force or veto certain key decisions, e.g., hiring or firing the CEO, selling the company, raising money, etc. The only way to remove their equity holding in the cap table is by buying them out or through a recapitalization of the company. Founders have rights as shareholders.

Founder 44
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Silicon Valley Frontlines: Two Tales of "Working For Equity"

philipsmith.typepad.com

a year burn rate and your equity is worthless due to numerous recapitalizations and bridge loans from investors then either you don't get it or I'm stupid to do it. Looks like you should have hired a CFO a long time ago! The second example came along just this morning. Don't get me wrong.

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Everything you ever wanted to know about advisors: Part 2.

venturehacks.com

Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options. They can also get terminated if the company is “reset&# , e.g. You hired a video game expert because you were building a video game but now you’re building a photo sharing site.

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On the Road to Recap:

abovethecrowd.com

Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. Their own ego is also a factor – will a down round signal weakness?

IPO 40
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Stock Market Drops. Then It Rallies. What Happens Next for Funding?

Both Sides of the Table

On the positive side, corporate profits are up, their balance sheets have been repaired and they have recapitalized themselves to have lower amounts of debt relative to equity. We have the inability to hire engineering in Silicon Valley or brand sales people in NYC but the country still has very high structural long-term unemployment.

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