The risk of joining a venture backed startup is that no new money comes in and there is no exit and you are out of business in a matter of weeks, like what happened here.

This is constantly looming over your head and used to be something understood by startup employees before the era of zero interest free money and "startups are kewl".

Any money raised got spent, otherwise they didn't need to raise it.

The trade off to take on the risk of being underpaid and possibly soon-to-be-unemployed by a startup are the potential equity payoff, the work environment and the human-networking. And it's usually worth it because you're buoyed by the local startup community and the high chance you get another job with people you know tomorrow if things don't work out.

The problem here is that our industry is flooded with the types of people who would otherwise have become lawyers or finance people because they chase comfort and status as opposed to a desire to work on cool shit with cool people. It kind of makes me hope these conditions extend for a while to weed out the people who don't belong and we can get things back to relatively-normal.

You keep insisting that a startup operating out of a garage with employees that all know each other requires the same risk profile as an at peak 1500 employee company with a quarter of a billion dollars in funding.

The only people who insist this must be true are founders that want to unload as much of the risk on their investors and employees as possible so that they themselves carry little to "skin in the game"

If you're operating in the red and funding pools dry up, there is no difference. That's the point.

The only things that matter are cash on hand, burn rate and your ability to raise new money. Convoy's cash on hand was tiny, its burn rate was enormous and its ability to fundraise was zero.

what that "skin in the game" means is that you are participating and take on some of the risk.

"why it is a requirement" has nothing to do with the law, the whims of "the founders", etc.

why it is a requirement is an economic truth - if there are enough players that believe that a gamble on working for an early stage startup is worth taking on some substantial, but perhaps not ruinous, risk, then that sets the bar.

> Founders want you to believe this but it doesn't have to be true.

Whether that is true, or "has to be true" depends only on the market. It certainly seems that it was true very true and probably still is. But neither you, the law, nor the founders have any control over whether it is worth it at the moment in your situation.