Well, it finally hit home.
carpenter
Posts: 362
I'm currently with a startup company I founded with three of my friends.
We got an investment from a small group of private investors, After coming up the seed money ourselves. We hired a few good people, all experts in fixed income trading, and set up shop four years ago. From the very beginning, things went extremely well. We even secured a heavy weight Wall Street client as a first production installation.
... and then it hit the fan. big time.
Our investors have been hemorrhaging cash for months now, one write off at a time. To make matters even worse, our target clients are investments banks and hedge funds. nowadays, a lot of them are struggling just to stay afloat.
Why am I telling you all this?
We had to make an emergency plan for the next year and a half, until we expect the markets to settle. We had to execute it immediately. Basically this means that we needed to slow down are cash burn rate significantly, so we can stay in business without the need to collect any money from out investors. All the founding members, including me, agreed to take a 25% pay cut (trust me, I'm going to feel that. to begin with, we all draw a smaller salary then our market potential, because we own a chunk of the company). The rest of the employees agreed to a 15% cut, and two guys have to go.
one of them is a close friend whom I brought to work with us last year. for the first time in my life I had to experience the crappy vibe of firing an employee. two of them actually. I hate this crap. hate it. In any case, the recession made its grand entrance into my life. no longer is it merely a presidential debate topic. I hope, whoever the new administration appoints to sort this mess, is worthy to be trusted with this overwhelming responsibility.
Have a good one,
Lee.
We got an investment from a small group of private investors, After coming up the seed money ourselves. We hired a few good people, all experts in fixed income trading, and set up shop four years ago. From the very beginning, things went extremely well. We even secured a heavy weight Wall Street client as a first production installation.
... and then it hit the fan. big time.
Our investors have been hemorrhaging cash for months now, one write off at a time. To make matters even worse, our target clients are investments banks and hedge funds. nowadays, a lot of them are struggling just to stay afloat.
Why am I telling you all this?
We had to make an emergency plan for the next year and a half, until we expect the markets to settle. We had to execute it immediately. Basically this means that we needed to slow down are cash burn rate significantly, so we can stay in business without the need to collect any money from out investors. All the founding members, including me, agreed to take a 25% pay cut (trust me, I'm going to feel that. to begin with, we all draw a smaller salary then our market potential, because we own a chunk of the company). The rest of the employees agreed to a 15% cut, and two guys have to go.
one of them is a close friend whom I brought to work with us last year. for the first time in my life I had to experience the crappy vibe of firing an employee. two of them actually. I hate this crap. hate it. In any case, the recession made its grand entrance into my life. no longer is it merely a presidential debate topic. I hope, whoever the new administration appoints to sort this mess, is worthy to be trusted with this overwhelming responsibility.
Have a good one,
Lee.
"If the global crisis continues, by the end of the year Only two Banks will be operational, the Blood Bank and the Sperm Bank. Then these 2 banks will merge and it will be called 'The Bloody **** Bank'"
Post edited by carpenter on
Comments
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Sorry to hear. Things usually pick up after a new president comes in. I'll say a prayer.
BenPlease. Please contact me a ben62670 @ yahoo.com. Make sure to include who you are, and you are from Polk so I don't delete your email. Also I am now physically unable to work on any projects. If you need help let these guys know. There are many people who will help if you let them know where you are.
Thanks
Ben -
Sorry to hear about your business. As a banker I know of the precariousness of your situation. The banking business is not fun right now.I hope, whoever the new administration appoints to sort this mess, is worthy to be trusted with this overwhelming responsibility.
I'm sorry...but there is no President, no Department head, no group of legislators that are going to be able to "fix" this mess. This mess will have to sort itself out. The US economy (not to mention the world economy) is too big, too complex for anyone to "fix" it. The various worldwide governments can take steps to improve the environment for the economy to eventually right itself...but they ain’t going to fix it. In some instances they can take drastic steps to stop an individual company or industry from collapse (as we have seen) but those are bandaids at best (unfortunately necessary), IMO only time, patience and economic forces will fix the issues."Just because youre offended doesnt mean youre right." - Ricky Gervais
"For those who believe, no proof is necessary. For those who don't believe, no proof is possible." - Stuart Chase
"Consistency requires you to be as ignorant today as you were a year ago." - Bernard Berenson -
Normally I would agree with you. I've given this a lot of thought in the last few month, trying to determine where do I stand on this issue. I've been a life long believer and supporter of letting the market forces, and them alone to steer the economy. However, in this case, I'm not so sure. The reason is that it is not the market forces that got us into this mess. It's crime. fraud. I can't think of a cleaner term to use. The government's role in the economy is never to directly intervene, but only to enforce the law. To regulate the markets, only from the legal, administrative perspective. it had failed. miserably. Years of undisturbed Illegal activity in the market, changed the most basic rule of the game: it is not a FREE market. It was an intended distortion of the FREE MARKET system. The government's only role, was to prevent that from happening and they failed. I see the Free Market system a a victim of what went on, and certainly not as the cause. This is why I'm not convinced that the right thing to do it to let the market bounce back on its own, because that might collide with the next generation's right to prosperity.
However, this is all theory. both what I think and what you do.
the simple fact is that the government IS going to take big action. Like it or not (that goes to both of us). just look at the 324 billion City Group's bailout. not the mention the original 700 billion."If the global crisis continues, by the end of the year Only two Banks will be operational, the Blood Bank and the Sperm Bank. Then these 2 banks will merge and it will be called 'The Bloody **** Bank'" -
Lee,
Sorry to hear that things are not going so well for you at this time. Hang in there if you can. Don't do anything stupid like go into a huge amount of debt just to save the company either.
Don't think about having to fire any employees or friends. I'm sure they understand times are much different even just 12 month's since your friend was hired. Plus you didn't fire him, you laid him off for whatever reason.. usually lack of cash flow or lack of work coming in.
Best of luck and hope that your biz can turn around soon.PolkFest 2012, who's going>?
Vancouver, Canada Sept 30th, 2012 - Madonna concert :cheesygrin: -
Thanks man
"If the global crisis continues, by the end of the year Only two Banks will be operational, the Blood Bank and the Sperm Bank. Then these 2 banks will merge and it will be called 'The Bloody **** Bank'" -
Sorry to hear about your business. As a banker I know of the precariousness of your situation. The banking business is not fun right now.
I'm sorry...but there is no President, no Department head, no group of legislators that are going to be able to "fix" this mess. This mess will have to sort itself out. The US economy (not to mention the world economy) is too big, too complex for anyone to "fix" it. The various worldwide governments can take steps to improve the environment for the economy to eventually right itself...but they aint going to fix it. In some instances they can take drastic steps to stop an individual company or industry from collapse (as we have seen) but those are bandaids at best (unfortunately necessary), IMO only time, patience and economic forces will fix the issues.
Thank you Shack!! While Carpenter's story is being told over and over by small business owners like him, trusting the government to get "us" out of this mess is the last thing you want.
Now the good ol' government has pledged 7.4 TRILLION dollars to get us out of this. First off the number is staggering, second off EVERYONE is going to feel this mess. Where do you think they are going to get 7.4 trillion dollars? From us!
Just gotta love how this government from all sides (Dems and Repubs) are throwing money at this depression hoping something will stick. Anyone notice nothing is sticking and we are going to throw more at it. Sickening...just sickening.
http://bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home
My feeling is there are multiple companies out there that are really struggling bad. Real bad. And they are trying to make it to January before they start the layoffs. Just my opinion. I am in the health care field and I am worried about my job. Definitely worried about my wife's job, and I foresee her losing it really soon, as a nurse she just makes way to much money, and her job will be the first in the cuts. Many hospitals are cutting back big time here in Tucson. We are the only ones that have not. -
Didn't ya'll hear.......the "New Deal" is back in town, the "New Deal" is back in town.
It hit home here about a year ago. I wouldn't wish it on my worse enemy...well let me think on that one.
Good luck."SOME PEOPLE CALL ME MAURICE,
CAUSE I SPEAK OF THE POMPITIOUS OF LOVE" -
I am so sorry to hear that it has hit your home Lee. I feel your pain. There's one thing to read about these kinds of troubles on the net. There's another thing for you, your partners, the ones you laid off and the families they support to actually experience it.
Good luck my friend, really.~ In search of accurate reproduction of music. Real sound is my reference and while perfection may not be attainable? If I chase it, I might just catch excellence. ~ -
Good luck, Times are hard everywhere. My comapnay has just gone through a restructuring and let go of a bunch of the higher ups. We have had our sallaries locked for a year now and I am sure they will extend that longer.
I am just happy to be working at a time like this.
Sorry to hear you had to lay off a friend and another employee. I have done it a few times and it is never easy, Hopefully with some serious luck things will take a turn for the better.
Chin up, and Like Danger said don't do anything crazy to stay open. You could pay(Literally) for the rest of your life for a bad move. -
It was an intended distortion of the FREE MARKET system.
Intended is right.
I hope you make through to the other side.-Ignorance is strength -
