Hacker News Reader

> The CEO also doesn't bother to thank anyone despite being literally and metaphorically indebted to investors, users, and employees for getting as far as they did.

"To all the employees, customers, users, investors, advisors, partners, competitors, consultants, analysts, and vendors who helped us – there are thousands of you, and you know who you are – please accept our enduring, deeply felt gratitude."

Missed that; thanks for correcting me.

So at least there's one line of "thanks"

Unless an investor additionally gave a loan, there is no debt owed in any way to investors - that's the point, they made a decision to invest at risk and presumably did due diligence based on accurate information.

Errr, wait what?

Firstly, to say there's no debt, monetary or otherwise, to someone who believed in your company enough to hand over their own money (or money in their control) to back you is just pure arrogance.

Secondly, there absolutely is debt. When a company goes into administration the assets are sold to pay out those who hold equity in the company. They're literally owed debt.

EDIT: To clarify for those responding saying that equity does not constitute debt...

Creditors and investors are different, absolutely. It is also correct that investors are typically paid last during administration (although investors may form agreements to come before other investors). Nonetheless, during administration, the administrator determines how much money the investors are "owed", which is literally the definition of debt.

They're not owed debt. They own a piece of the company. When the assets are liquidated they will get their share unless they are on the shit-end of a liquidation preference clause.

not to quibble, but no, they're not literally owed debt. The assets of the company are used to pay off any actual debt (payroll taxes, outstanding invoices to vendors, etc). Only then is any remaining money distributed to the equity holders. They take absolutely last.

> When a company goes into administration the assets are sold to pay out those who hold equity in the company. They're literally owed debt.

This is incorrect. Please see the differences between equity and debt. [1]

[1] http://smallbusiness.findlaw.com/business-finances/debt-vs-e...

No matter how many times you say that this situation is "literally the definition of debt" you're still not going to the legal definition of debt so that it applies here. Equity is not debt, they do both until eventually owing another entity money. But in a legal sense that is not literally the definition of debt, because it is also part of equity which again isn't debt.

From a practical perspective the difference is that with equity you accept a lower floor (you might get nothing) in exchange for a higher ceiling (your invest might 100x if the company goes public). That's the deal these investors signed up for and unfortunately for them they got option number 1. They're not owed anything because that's the deal they agreed to.

I have zero idea what the legal definition of debt is in the country/jurisdiction you live in. I also didn't specify what country I live in.

Additionally, my first point was one of metaphorical (social) debt.

Given the context and the fact I'm typing in English it ought to have been clear I was referring to the definition of debt in English. If that wasn't clear, I apologise for the confusion.

> I have zero idea what the legal definition of debt is in the country/jurisdiction you live in. I also didn't specify what country I live in.

Only definition that matters is the one in the jurisdiction this startup was in.

Last I checked this was a tech website not a legal one...

So?

comment says "metaphoric" debt. Surely you can agree that the principals of a company owe (in the sense of being socially obligated) a debt of thanks and gratitude to investors for taking a risk on them in the first place?

No.

The relationship is wrong if you feel indebted to your investors and like they deserve thanks. They are partners in the business.

Presumably the CEO did all they could to succeed and behaved in an ethical and honorable manner. If they did so, then investors have been well served.

I will agree however that anyone who ever chooses to do business with you in any context deserves thanks. On that basis, thanks is deserved.

> The relationship is wrong if you feel indebted to your investors and like they deserve thanks. They are partners in the business.

Plus, they knew the risks. There is no reason to feel sorry for early-stage investors who lose money unless some kind of fraud was perpetrated on them.

Do you feel sorry for an athlete who hurts themselves?

Do you feel sorry for wife of a stuntman who dies in an accident?

Do you feel sorry for those with a gambling addiction?

I can understand why you wouldn't at all feel sorry for an investor to the same extent as my examples above; presumably the investor hasn't ruined their life. However, my point is knowing the risks doesn't preclude someone from receiving empathy/sympathy.

> I can understand why you wouldn't at all feel sorry for an investor to the same extent as my examples above; presumably the investor hasn't ruined their life. However, my point is knowing the risks doesn't preclude someone from receiving empathy/sympathy.

I was not writing about a general case of risktaking: I was writing specifically about investors.

If I had been writing about athletes, stuntmen, gamblers, or any other kind of people, I would have written something that took into account the different contexts in which such people take risks.

I really don't see what you are trying to accomplish by changing the focus from a specific case to a general case.

> Surely you can agree that the principals of a company owe (in the sense of being socially obligated) a debt of thanks and gratitude to investors for taking a risk on them in the first place?

Investors don't take on risk for the sake of the company they invest in. They take on risk because they think they will make money for themselves, and they would screw over the CEO and all of the employees, and other investors, in a heartbeat if they could get a good exit.

The investors got an ownership stake in an early-stage company with a high risk of failure and a corresponding high potential reward. The company got money to fund operations. Both parties got what they signed up for, and there is no imbalance in gratitude owed.

> I called these “Friends of ClusterHQ” by the sobriquet “FoCkers”

To me this just sounds like a shot at irony by combining crudity with eloquence, fully agree with your sentiment though.

Mark Davis is pretty tone-deaf, it reads like "hahaha good times, didn't we have a good run, FoCkers?" while the message is "here's a bunch of problems and you probably need to work overtime".

I think he's trying to keep his employees optimistic and happy. Like the investors, surely they knew that getting involved in an early-stage company was risky, but they were willing to do it because they were excited by the prospects, committed to the vision, or similar. While it is clear that the post was not written by a management professional, as a completely uninvolved individual, I personally didn't find the authentic, human tone jarring. I understand more directly involved people may feel differently.

I don't know what ClusterHQ did, but presumably they may have some users for whom the abrupt shutdown is inconvenient at best, especially if their company depended on whatever this is in production and now they have to try to fix it 3 days before Xmas with 40% of the company's staff on leave and the remaining 60% mentally checked out. I think that's the only group that this post disrespects. It would've been nice if he could have at least offered some alternatives, announced the shutdown ahead of time, or given some sort of migration path.

Is there a service that's shutting down? As I understand it, Flocker is an open source product you're meant to self-host.

Dude, chill.