Ask HN: How do I explain “startup went bankrupt” to family and future employer?

I think you can be honest without badmouthing anyone necessarily: "startup went bankrupt due to reasons beyond my control".

As for letting your startup founders know why you're leaving - it really depends on your relationship with them but i would got for a professional - "i'd like to expole other opportunities and i wish you all the very best!"

Startups fail all the time. Just say it didn't work out - you don't need to give all the details.

I used the generic 'time to move on' response. You don't owe anybody an explanation for anything.

Startups failing is nothing new, if anything it would probably be seen as a positive by most reasonable employers. Definitely leave out explanations as to exactly why; "it just didn't grow fast enough" should be enough.

I worked for a startup that went out of business. There is a whole of detail, but basically the last client canceled the project and they ran out of money. So I was laid off.

That is what I tell people. They understand that as companies run out of money all the time. The important thing is that in my experience people take it at face value.

What I don’t do is air the dirty laundry about how the company got into that position in the first place.

Maybe a few years down the line I’ll tell people about it over beers as we are exchanging war stories. However it is not some that you need to mention while looking for another job.

The easy answer to your actual question is "job ended because company went bankrupt". It happens all the time. It doesn't reflect poorly on employees.

The longer answer is the nature of your post makes me think you might have some self work to do, which could be more helpful to your future prospects than the fairly simple issue you're asking about. I don't know you, but using the terms "psycho" vs especially "retard" to describe people in public makes me think you should think hard about your communications patterns and your internal mindset. And while being inside a failing company is stressful, to the outside world, it's not a big deal. Don't bring that negativity with you when you leave the company.

Failure isn’t something to be ashamed of, unless you keep failing for the same reasons. Your startup’s bankruptcy has taught you valuable lessons. If any of those lessons are applicable, discuss them.

Crap.... didn’t read past the title.

First job?

Career advice: never bad mouth a former employer. Consider the perspective of the person sitting across the table from you. Would you want to hire someone who is negative?

Another piece of career advice: saying someone went 'retard' is not really appropriate.

Just tell the truth. Maybe leave out a few details like "The founder went full retard and psycho and bought loads of drugs". How you say something is probably more important than the fact themselves.

I would say something like:

> They (the startup) had problems with raising capital and expanded too fast and our founder seem to lack the dedication to run the the business and things fell apart despite my best efforts.

That is perfectly acceptable.

This is normal. All you need to say is the startup experienced financial difficulty due to poor sales. You are concerned about job stability. No further explanation is needed.

My pithy summary in interviews is “i worked for a startup that didn’t.”

> The founder went full retard

This is not only unprofessional, but straight up offensive. If your demeanor is even close to similar in conversations with other peers or prospective employers, you will have a very difficult time being taken seriously.

"Don't speak ill of past employers" is mostly a myth for me. Shitty companies and shitty managers are not at all rare. Don't act salty or say they didn't appreciate your genius, but if you can very clearly articulate what you observed of their mismanagement and how they could have done better, that's actually a great interview talking point.

Most startups fail and any reasonable employer will understand this. Usually, though, it's best to frame it as a pull from your prospective employer rather than a push from your current one.

This is very easy.

Q. Why did you leave?

"The startup ran out of money."

Q. Was that you fault?

"I had no financial responsibilities in the company."

Now, if you did, that gets tougher...

There is nothing to explain. Startups go out of business all the time. You simply tell them your last company ran out of money and you were laid off.

Hard, dumb, blanket rules are hard and dumb. You can talk about your previous employers, if you do it right. More on that in a minute.

Plainly saying they went bankrupt is probably enough detail for most interviewers. It's blunt and direct, yet vague enough to be somewhat diplomatic. I certainly wouldn't feel ashamed about it. At the company level, bankruptcy of a startup is actually the expected outcome, statistically speaking. Shouldn't raise any eyebrows. And at the personal level, you even tried to confront them about the burn rate, so you shouldn't have any personal shame about it.

If somebody really presses you hard for why you thought the company failed, just tell them what you told us, and qualify it as your own opinion: "I think they probably burned too much money scaling the team before owning the product market fit." Sounds like a reasonably intelligent analysis of what happened (though personally I might question the use of the word "owning" just stylistically speaking... maybe "finding" instead?).

You can make yourself look good here, or bad. If you're capable of formulating a blame-free, diplomatic, equanimous (is that a word? I mean even-tempered/calm/composed/having equanimity), intelligent, big-picture analysis of why things went wrong, that makes you look good. If all you can manage are self-centered, immature, emotional hissy-fits about perceived slights that were of no particular consequence to anyone but you (small-picture), that makes you look bad. Getting into the character flaws, dishonesty and/or detailed mistakes of your management, is territory you want to avoid in an interview because it tends to torpedo your chances instantly. That's the reason the conventional wisdom is never to "badmouth" previous employers, PERIOD. I would obviously refine that somewhat, as detailed above. Analysis OK, gossipy shit-talk bad.

The person you're talking to is evaluating you, not your previous employer. If they see before them someone with complaints, they'll assume you're just a complainer, not someone with a legitimate complaint. Likewise if they see before them someone from a bankrupt company who has a calm analytical big-picture outlook, is a bit business-savvy, and has the company's best interests at heart, they'll see it as a great opportunity for them.

If the company is indeed dead, all the other answers that tell you to just say "my employer went bankrupt" are correct. If you're asking about how to talk about the reason for your job search before the company/your job is officially dead, (for this one or for future reference in case) you can still be pretty candid without telling unnecessary details.

"I've become concerned about the sustainability/prospects of the company" is fine.

How about:

I lost confidence in the businesses ability to succeed, despite all my efforts to help it grow. Further questions would hopefully allow you provide examples of what an excellent employee you were.

As someone who employs developers, I don't really even care why it went South - well at least if you didn't wreck havvoc at the place. Startups are big bets, and they mostly go south because most ideas don't work out. I would be interested to hear what you learnt though - if you can reflect well on things going south. What I really do care about is your skills and your ways of working with colleagues. I care about technical know-how, clean code/defensive/architecture, testing your code, awareness of non-functional requirements and how you work to ensure your code doesn't suck or is even dangerous to my clients/citizens, the ability to be a mench that contribute to the team delivering. Those are my standard, and they have nothing to do with your startup going south. So don't worry. I don't think any other managers would care too much either.

Never complain. Just say that you wanted to move on to bigger and better projects.

> using the terms "psycho" vs especially "retard"

I agree with your advice about how to behave in professional settings. It's worth pointing out though that 'full retard' is a decade-old meme from Tropic Thunder. It's widely used in Internet culture, and while mildly off-color for HN, isn't something to draw broad conclusions from. Here's the scene:

https://www.youtube.com/watch?v=X6WHBO_Qc-Q

All you need to say is in the title of the post. "Company went bankrupt."

Are you leaving, or are has the company actually gone bankrupt and laid you off.

If it's the latter, telling prospective employers that the company went bankrupt and potentially mentioning that they couldn't secure another round of funding should be more than enough.

If it's the former, it's trickier, especially if the company actually pulls through.

Either way I'd tone down the analysis - as a sometimes hiring manager I might be interested in your analysis that the company burned too much money, but not so much in the "in-depth" analysis of the founder's behaviour.

BTW, I've had to close down a company before because it went bankrupt. I have the utmost sympathy for the founder who spent the last couple of grand on weed.

I've interviewed and hired hundreds of talented technical people and would look favorably on a candidate that said they had concerns on the financial viability of the company, and that the viability concerns were not related to anything they could influence, such as product or service quality, and so leaving was the best option.