Why? What's wrong with "here are our numbers; as you can see we're at about 6 months left of runway but we have X, Y and Z that we believe should take care of it without issue"?
Seems like being transparent in the finances would be a good thing. To me at least; I know as an employee I feel much more comfortable when I know how the company is doing. It at least let's me know I have some solid time left should the worst happen.
Management must of course be honest. And, especially at inflection points like initial hire, new financings, or major changes in burn/strategy/etc, it should share with employees an optimistic-yet-plausible projection of the business prospects. (Attentive employees should ask; management should answer.)
But once that's done – and perhaps in somewhat coarse, conditional, speculative terms – a running detailed 'soap opera' of the sustaining-funding-hunt can be destructive. Many employees would honestly not want to be distracted by a play-by-play: "that prospect fell through but we've got more meetings next week! drop dead date is still 152 days away! next update tomorrow morning!" Employees also don't want their most-jittery (but possibly still key-role) coworkers to depart early: making the worst-case scenario incrementally more likely.
The balancing will always be tough: is a believed 80%-chance of uninterrupted operation enough to keep sending a cheery, full-speed-ahead message? Or must you alert, "20% chance of failure!", to everyone? (Which, of course, causes some to assume the risk is even worse, and might derail the 80% chance of success.)
It's the idea of a firm, quite-long threshold – and in a startup domain that's inherently uncertain – that I find absurd. ("6 months" is three times larger than the 60-day federal law for notice of mass plant layoffs, by giant well-capitalized corporations.)
Hmm, I feel like you took my thought to the most extreme view possible.
I was thinking more along the lines of: notification at 6 month mark, list of things we're doing to ensure smooth operation. I wouldn't expect issues at that point especially since everyone joined a start-up, they know it's not going to have money for years of operation. Then update people when you check off the items on the list that you said you were working on, good or bad. Not any more frequent than that. Depending on the amount of money it may be a good time to start about some minor culling if possible.
At month 3 you probably want to start culling employees so you can stay afloat longer should things not pan out. This way you can stretch out your life for far longer than waiting to cull at 2 or 1 month.
At least those are my thoughts. Nothing like "guys we failed, new update tomorrow morning!". Then again I haven't run a start-up; only have been part of a few. That just makes sense to me I don't know what works best in practice.
Why? What's wrong with "here are our numbers; as you can see we're at about 6 months left of runway but we have X, Y and Z that we believe should take care of it without issue"?
Seems like being transparent in the finances would be a good thing. To me at least; I know as an employee I feel much more comfortable when I know how the company is doing. It at least let's me know I have some solid time left should the worst happen.