A lot of people — workers, creditors, investors, and even taxpayers — got burned in the dot-bomb of the last year. Until recently, I didn’t know I was one of them.
It turned out I was legally “robbed” (my term) of about $7,000 with no remorse and no recourse. I don’t want sympathy here. I want you to understand that this is commonplace. And I want you to ask yourself how all the people burned in this way should be expected to feel the next time you ask them for their trust.
My story begins with “free stock.” A site I once wrote for gave me 500 options, payable over five years, for my loyalty to them. Then they merged into another company and half the options were suddenly exercisable.
I was excited. The stock was selling for $100 per share. I sent in my money, stuck the stock in my retirement account, then had my gig taken away. I turned around a few months later to see my stock was worth $2 per share — I was out about $3,400.
OK, you say, caveat emptor. If something looks too good to be true, it usually is. So maybe when I get old I’ll eat flank steak and not filet — it’s better for you, anyway.
A few months later, I’m asked by another site to contribute a weekly column. I start to work and do a good job. The readers are happy, the editors are happy, and I’m happy. But my accountant is unhappy because the checks aren’t coming in.
I’m a trusting soul by nature, but I finally call to complain two months later. Don’t worry, I’m assured, these things just take time to make it through our system. You’ll be paid. Weekly checks begin to arrive a month later.
Then, a few months after that, this outfit has to say goodbye. They’re making cutbacks and can’t afford as much content. The checks stop.
Yesterday the other shoe drops. It comes in the form of a Tyvek envelope. Inside is the Chapter 11 paperwork from this dot-bomb. I push it aside and go out to do some family errands.
But the accountant (who doubles as my wife) calls me over on my return and insists I read the papers. It turns out I’m one of this deadbeat’s 20 top unsecured creditors. The folks at the dot-bomb never caught up on my payments and I’m out $3,600. But I’m not alone. Right there with me are their Web host, lawyer, landlord, and all the people they “bought” advertising from.
In my 20-year career, I’ve always trusted editors to pay me, and mostly they’ve been good about doing so. I tell people you need to be careful about any business where the first word is “submission,” then we both laugh. But now I’m sitting on a bad debt of $3,600, the only Atlanta-based member of a Seattle creditor committee. Do you think I’ll trust promises next time? Burn me twice, shame on me.
But as I said, this isn’t about me. A lot of fast talkers failed to fulfill their promises and burned millions of people for billions of dollars in the last year. And believe me, your next start-up will pay the price for that.
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