"That's one hell of a lottery ticket"
This Venture Capital Startup offering its employees personally backed loans to "beat" the IRS taxes on their lottery-ticket startup options just makes me feel so bad. We've really reached a fucked up local minima of Venture-Capitalism, this is such an immoral and sad thing to see. This company is laying off 33% of their staff today because their founders over-hired, over-sold during COVID-time, and now possibly not worth the paper they're printed on. It's really incredible when your business model is basically "we are going to light money on fire as fast as we can until we have a majority market share and a public exit to pawn off our shrinking opportunities for positive revenue on", and folks just kind of accept that and buy in to it. I really would like to see some tech capital drawdown, this sort of stuff can't keep up.
Why would you early exercise stock that hasn't vested yet? so you can unload it on secondary buyers on the various VC private markets as the valuations ratchet up before an IPO, obviously! incredible.
"We did it as a series D company"
Employees take risk since the loans are 100% personal recourse.
So the EARLIER in the company’s life cycle you do this, the better it is ✨
I.e. If you are a Seed thru Series B company, this is a NO-BRAINER.
At Bolt, we did it as a Series D company ⚡⚡⚡
The company is offering employees an incredibly risky lottery ticket personally backed by a boss posting slapfights online like a 10 year old with ADHD with the ability to seize your is. property. That is a hell of a Devil's Gambit. They've done it on much larger valuations, for employees to have much higher strike prices and much larger tax burdens, than most responsible companies do.
I'm not a betting man but that seems like a bad bet even before the economic recession/Financial drawdown we're slipping in to. I mighta taken it if I was in that position at Uber….. 🙁
Lot of folks will be writing off
Bolt claimed 100x future revenue multiples
I called it ages ago – this company is an utter train wreck. I am honestly ashamed of the entire industry for birthing and fostering this basically fraudulent company. Its mistakes and lies are compounding on themselves, creating awful outcomes for its employees:
Company almost certainly juiced its usage numbers, potentially by buying users to inflate its customers revenues, so it could use those numbers to convince new customers
Used a single deal with a large company (Forever 21) to sell VCs on the vision, while under the hood that deal was clearly failing
ex CEO picked twitter fights constantly, to the point of calling into question whether he was even capable of focusing on execution
Biggest competitor (Fast) exploded even before the market crash.
Offered employees a four day work week while claiming rapid exponential growth
Offered employees PERSONALLY guaranteed loans to help them exercise the options
Raised at $11B valuation with 100x forward revenue multiples.
Cash raised is currently 6-8x revenue multiple, meaning valuation over next 12m makes employee options worthless
I've never seen the technology used on any website, and I am a frequent online shopper.
Real talk, is this fin-tech's latest Theranos?
The founder of Bolt ran a shell-company to offer the loans to employees
this founder tweeting like he's a nine year old with ADHD with his pfp in half lotus is a real piece of work
At Bolt, we think fearlessly and put people first 🧑🤝🧑
This has driven Conscious Culture (http://conscious.org), 4-day workweek (http://fourdayweek.com), and so many other first-of-its-kind programs.
This program is just another example.