A Weekly ComputorEdge Column by Douglas E. Welch





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August 18, 2000

Surviving a high-tech shutdown

© 2000, Douglas E. Welch

Internet startups are attracting more and more technical talent every day, but lately we are starting to see an increase in companies that can't get through their growing pains. While your career can be greatly enhanced by working for an Internet startup, even a failed one, you need to remember some important rules for protecting yourself if the company doesn't make it past the first round of venture capital funding.

Keeping your ears open

Often, Internet startups can quickly move from being the "new, new thing" to just another failed company. Where larger, more established companies might have a gradual decline lasting months or years, Internet startups can crash almost overnight. With this in mind, you should pay close attention to not only the technical side of the company, but the business side, as well.

First, keep a close watch on what the principals of the company are doing and saying. They will try to put a good spin on everything, but it is often easy to tell when things are going well or going badly. While you certainly don't want to be accused of eavesdropping, listen closely to any information you are privy too, especially if it is given in an informal way. You want to know if the search for funding is going well or if the venture capitalists are yawning. You want to know if another, larger, company is looking to buy your company.

Second, visit your favorite high-tech news site and set up a news filter to watch for information about your company. Too often, employees of a company are the last to know when the company is in trouble. News stories will help to balance the cheerleading that you might encounter in the office.

Finally, join up with a local industry group that exposes you to employees of other high-tech companies in your area. You will find that these groups can often be a good way of finding out how your company is perceived within the industry. Since everyone is plugged into the same industry you might hear about problems at your company long before you notice them yourself. For example, hearing your company is not paying its bills to another high-tech company should raise a red flag and allow you to investigate further.

Protect yourself

The main reason for all this investigative energy is simple, to protect yourself from suddenly being out of a job. It might sound a bit mercenary, but it is better to abandon a ship while it is sinking than after it has slipped beneath the bankruptcy waves. You don't want to be left stranded should your company not make the cut.

Your first goal, should you find out your company is about to fold, is to find a new position. You should make use of any connections you have made in your current position to reach out for your next job. You won't want to necessarily tell people that you are leaving because the company is folding, that can generate bad feelings all around. Merely state that you are looking for a new opportunity and challenge. Keep any comments about your current company as non-committal as possible. You don't want to burn any bridges you might have to cross later.

Next, make sure that any money owed you is paid. This includes payroll, reimbursements for purchases you made on the company's behalf, medical reimbursements, vacation pay, etc. Too often, companies suddenly announce they can't meet their payroll long after your work has already been completed. Slow payments, or no payments should raise an immediate red flag. You want to consider very carefully how much work you are doing if there is any possibility you might not get paid.

Especially make sure you have not extended your own credit to pay for company property or services. If you purchased anything on your personal credit cards or with your own cash, reimbursement should be made immediately. Don't let these payments linger or you might find yourself eating some of the company's debt should they suddenly fold. In fact, I would further recommend that you don't extend yourself in this way, if at all possible. It will be better for everyone concerned.

No one wants to wish the demise of any company, but the speed of failure in today's high-tech world requires you to be on the look out for signs that your company is not in the best of health. You owe it to yourself to be aware of your surroundings so that the failure of your employer doesn't cause the failure of your career.

Previous Career-Op Columns

August 1999 Other people's problems

August 1998 Skills You Need (Parts 1-4)

August 1997 What does it take?: Part 1

Douglas E. Welch is a freelance writer and computer consultant in Van Nuys, California. Readers can discuss career issues with other readers by joining the Career Opportunities Discussion on Douglas' web page at:

He can reached via email at

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