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What's your negotiating position at that time? Before you accept money you have alternatives, you can get by with no money, you can look for money elsewhere, et
by olefoo 17y ago
What's your negotiating position at that time? Before you accept money you have alternatives, you can get by with no money, you can look for money elsewhere, etc. Once you've committed, gotten the money, hired the team, spent the money on advertising or building out or customer aquisition... your negotiating position is much weaker.
If you're going down that path, be prepared to look objectively at your own performance, and be as ruthless about the changes that need to be made as your backers will be. It's my observation that a breakdown of communications between the board and the management team is the root cause of the management being replaced.
But yes, once you accept funding it's no longer your company; you are answerable to your shareholders.
- vaksel 17y agothat seems backwards. At this point you still control the majority of the company + the board. If the VC's money is gone, so is their negotiation position, since the only way for them to get their money back is for you to succeed. As long as you control 51% of the company, you aren't required to play along in planning your down fall
- olefoo 17y agoHave you ever worked in a funded startup? It's not a game of chess; it's more like a game of lacrosse where you are the only one without a mask. As an officer of the company you have a fiduciary responsibility to your minority shareholders which can override the ownership share, or earn you lawsuits you will lose if you don't go along with the boards idea of how to fulfill it. And in the meantime, you need to be hustling to make the company work. You don't have time for boardroom shenanigans if you are doing it right; and if you're doing it right you'll be part of the 50% of founder/CEO's whom forcing out would be a bad idea.