Boards are dangerous to founder/CEOs
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Boards are dangerous to founder/CEOs
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Re: Boards are dangerous to founder/CEOs
#2when you get thrown off of the board you still have your shares.
so the trade is still successful by my rubric. I consider all things to be trades, whether I invested in a publicly traded equity, or whether I created a bunch of $0.00 par value shares to sell to a bunch of other people.
the rule is the same: don't get married to a company.
a board removing you doesn't need any fanfare. you still have the shares.
Re: Boards are dangerous to founder/CEOs
#3when you get thrown off of the board you still have your shares. so the trade is still successful by my rubric. I consider all things to be trades, whether I invested in a publicly traded equity, or whether I created a bunch of $0.00 par value shares to sell to a bunch of other people. the rule is the same: don't get married to a company. a board removing you doesn't need any fanfare. you still have the shares.
Headline - I agree with you.
Just retire, or do something else. You own the shares.
Fine Print: There's still some screwy stuff they can do diluting your shares in particular.
Re: Boards are dangerous to founder/CEOs
#4Great article, I really enjoyed everything about this piece. Nice insight into the realities of the boardroom.
Re: Boards are dangerous to founder/CEOs
#5when you get thrown off of the board you still have your shares. so the trade is still successful by my rubric. I consider all things to be trades, whether I invested in a publicly traded equity, or whether I created a bunch of $0.00 par value shares to sell to a bunch of other people. the rule is the same: don't get married to a company. a board removing you doesn't need any fanfare. you still have the shares.
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Re: Boards are dangerous to founder/CEOs
#6If you give up your 51% share, sure.
Re: Boards are dangerous to founder/CEOs
#7when you get thrown off of the board you still have your shares. so the trade is still successful by my rubric. I consider all things to be trades, whether I invested in a publicly traded equity, or whether I created a bunch of $0.00 par value shares to sell to a bunch of other people. the rule is the same: don't get married to a company. a board removing you doesn't need any fanfare. you still have the shares.
See also "cram-down round" :-)
Re: Boards are dangerous to founder/CEOs
#8when you get thrown off of the board you still have your shares. so the trade is still successful by my rubric. I consider all things to be trades, whether I invested in a publicly traded equity, or whether I created a bunch of $0.00 par value shares to sell to a bunch of other people. the rule is the same: don't get married to a company. a board removing you doesn't need any fanfare. you still have the shares.
a board removing you doesn't need any fanfare. you still have the shares.
You do, but there isn't always a secondary market to sell them on, and if you leave under a really bad cloud the board will attempt to take the shares back, or issue a bunch more for themselves thus diluting your shares in to oblivion (see Eduardo Savauvin vs Facebook for details.) I don't think you should make light of leaving "with your shares" as if that's the end of the story. It might not be.
Re: Boards are dangerous to founder/CEOs
#9If you give up your 51% share, sure.
If you give up control.
Weighted shares let a minority shareholder have more than controlling vote in a company.
It is always important to understand the fabric of your company by reading, understanding, and following the terms of your Operating Agreement or Corporate ByLaws.
Manager Managed LLC vs Member Managed LLC vs C or S Corporation are most common entity types. Use the right structure to best protect your interests.
Re: Boards are dangerous to founder/CEOs
#10This is something you should really understand if you're starting a company. The board isn't your "friend" while individual board members may be, as an entity it probably isn't. The understanding that individuals can be "good" and the composite can be "bad" is usually encountered by most people when some government is doing something "bad" but the people who live where that government is in power are known to be "good." We see a lot of companies that have "good" employees but act in a "bad" way as a company.
So with that in mind, you have to understand that none of your "friends" would fire you, but the "board of directors" (even if composed of people you consider friends) could easily decide to do that.
Tom Lyon used to joke that it was only on your third startup that you funded yourself that you are really in control. The wisdom of that took a while to sink in for me.