Comment by mgkimsal | Hacker News Reader

Comment by mgkimsal | Hacker News Reader

I was in their shoes once, and it was a horrible experience. I had paychecks bouncing at the end, some tempers flaring, and overall was about as miserable as could be. I'd suggested that people start looking for other jobs - there was no turnaround in sight. This was just a group of 5 of us - not some huge office, so we were closer (physically, if nothing else) than some other larger orgs that have gone through this. To their credit, they stayed as long as possible, later than was probably prudent. That may have been partially due to the fact that few others in the area were hiring at the time.

Answer, you can try to sue, but there's probably very little chance you'll get your money any time soon. Whether you want to pursue this or not depends on a few things. Do you feel they mislead you? Do you think they really have money and are just lying to you?

The flipside of my experiences was about 4 years after that scenario above, I did some contracting with a company - remotely (unfortunately) and they didn't pay. I found out from discussions that the PM on my project quit soon after I started, another developer on the project quit as well. He'd told me he'd quit because he was tired of the contractors bitching to him they weren't getting paid - apparently this was a habit company X had. I had other contractors seek me out and tell me they'd been shafted on payments too - one for $700, and another for $3500. Mine was to the tune of close to $9000. (never again!). So... I drove up to his state and filed a lawsuit. It's been > 2 years, and it's still in the system. Will probably take another year, and at that point, I'd still have to collect. At this point, it's a matter of principal - the company's whole MO was to farm out work to contractors in various states, then not send payment. That's a whole other level of evil, imo.

But maybe I'm biased and I really was as scammy as the guy who didn't pay me? I don't think so. I was honest with people - there's no money coming in - take another job if you can get one. That's not what happened to me a few years later, though perhaps some might see it as divine retribution?

I think you can at least take some credit for telling your employees to look for other jobs.

Our CEO would come into our office and say, "I just had a meeting with a potential investor and he's committed $25k!" He always had our hopes up, but our CFO would paint a different picture. Even our president told me he was starting to pick up work on the side.

We'd had a not bad year - our first six figure project was earlier that year. However, the sales cycle was proving to be much longer than we'd anticipated (selling to higher ed) and then we had a couple of projects cancel (mid-late 2003). Everything became too much.

Later, I went back to working for others for a while. I smelled a bad burn rate at this company, but only after I'd sold my house and moved states. :/ We were supposed to be impressed with announcements of $x projects and $y investments, but it wasn't that hard to see that 20+ people at a company, being paid full time, would eat up those $x and $y in just a couple months, but the $x was for a 9 month project.

I ended up being extremely cynical and distrustful of others (as I'm sure a few people ended up distrusting me earlier) and it's taken years to get back a modicum of faith/optimism again. Working for myself seemed about the only way I could have a degree of control and not be left in the dark on finances. Yeah, my boss is a jerk, but I'm sleeping with his wife. ;)

I have seen this problem all to often and unfortunately the onus is on you to cut people. Entrepreneur and gamblers have a lot in common, one of them is the feeling of the big hit around the corner. The problem with Entrepreneur is many times they have others that depend on their direction.

People who have no vesting in the company other than a pay check, receive nothing from the gamble and in many cases don't even know they have money in the race. So the person that decides to do this is gambling the employees money and giving them no up side. They are exposing them to the risk and keeping all of the reward if it pays off.

Worse yet the fear of unemployment puts them at a deep psychological disadvantage so any gravy coating or straw of hope becomes bloated in their mind. It is a human trait that helps shield us from traumatic events.

In the end, at the first sign on trouble it is up to the vested parties to trim the company to the capital available. Unfortunately, as happens far to often, the rats on the mast leave the ship first. In other words those at the top start bailing while the gravy coating is being dished to the bottom. When you see the COO, CFO, VP's leaving the company it is time to go. It means the money has run out and there are no real talks from investment sources.

The worst offenders by far are those principals that leave and give a pep talk, to the guys in the field, going out the door to secure their package of the last remaining scraps.

Never work for future funds from a company with money troubles, investors do not invest in companies that get themselves into money troubles and do nothing to correct the imbalance.

9 times out of 10 these companies are run by megalomaniacs who want to play big business on investor funds.

If you do secure a contract for hard asserts in the event of default. In other words you walk out with servers, hardware or transferable software licenses. Ensure that the execution of the contract becomes valid 6 mo before any bankruptcy filing. To keep it clear of claw-backs.

I've been approached a few times by a company whose business model looked suspiciously like what you described. In fact, eerily similar. I don't want to name them here publicly because I'm not 100% sure that's what they were doing. But I felt strongly enough about it I walked away from them and ignore all email from them since.

fwiw, i wasn't approached - i'd simply answered an ad on craigslist.

Skip the law suit, call the fbi. The guy committed fraud, used a interstate commerce system (the internet) to do it, and he should be rotting in jail.

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