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Boards are dangerous to founder/CEOs

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Re: Boards are dangerous to founder/CEOs

#41

Post by WalterBright »

anthropodie wrote: post #26
ChuckMcM wrote: post #10

This 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 "goo…

“A group experience takes place on a lower level of consciousness than the experience of an individual. This is due to the fact that, when many people gather together to share one common emotion, the total psyche emerging from the group is below the level of the individual psyche. If it is a very large group, the collective psyche will be more like the psyche of an animal, which is the reason why the ethical attitude…

Now, think about the wisdom of a democracy :-)

Re: Boards are dangerous to founder/CEOs

#43

Post by nabla9 »

ChuckMcM wrote: post #10

This 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 "goo…

Good board needs to be able to act independently from the CEO. One reason for bad corporate governance in America is boards made from the friends of the CEO.

Re: Boards are dangerous to founder/CEOs

#44

Post by interroboink »

anthropodie wrote: post #26
ChuckMcM wrote: post #10

This 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 "goo…

“A group experience takes place on a lower level of consciousness than the experience of an individual. This is due to the fact that, when many people gather together to share one common emotion, the total psyche emerging from the group is below the level of the individual psyche. If it is a very large group, the collective psyche will be more like the psyche of an animal, which is the reason why the ethical attitude…

While I do think there's something of value in the idea here, boy do I find that quote unconvincing (:

The second sentence essentially says "This is due to the fact that that's how it is." I'm sure Jung has a larger context and basis for these claims, but this quote just struck me as super hand-wavy.

Re: Boards are dangerous to founder/CEOs

#45

Post by lostcolony »

mattkevan wrote: post #30
anthropodie wrote: post #26

Earlier quoted context omitted.

“A group experience takes place on a lower level of consciousness than the experience of an individual. This is due to the fact that, when many people gather together to share one common emotion, the total psyche emerging from the group is below the level of the individual psyche. If it is a very large group, the collective psyche will be more like the psyche of an animal, which is the reason why the ethical attitude…

“The intelligence of the creature known as a crowd, is the square root of the number of people in it.” - Terry Pratchett

Also Pratchett, and mathematically probably more accurate (decreasing rather than increasing with the more people added) - "the IQ of a mob is the IQ of its most stupid member divided by the number of mobsters"

Re: Boards are dangerous to founder/CEOs

#47

Post by VRay »

adventured wrote: post #24
0des wrote: post #16

It may be gauche to express this opinion on HN of all places and I hope it doesn't come off as tonedeaf disrespect, but does anybody notice VC is falling out of favor unless absolutely necessary? I am noticing a lot of bootstrappers that are emerging with the ethos that VC isn't what it used to be for some markets, and often a poor choice of the right VC can be a detriment to a project's longevity, with some teams ch…

I agree that is happening more often in the initial stages. And with a bit of experience/reputation you can command very favorable terms in the early stages of a start-up, at least in the present climate where seed type funding is relatively very easy to come by. Or let's say you don't have much money and you want to avoid early VC due to loss of control and hefty dilution. In the US market, move to a college town (o…

Man, I hear a lot of horror stories about working at Walgreens and the like on Reddit, even among pharmacists

I guess that just going there part time as part of a bigger plan will be a lot lower-stress than trying to make a living off it, but that still sounds like a bad idea

You might be better off working as an engineer for a year and then saving 3-4 years' worth of minimum wage money instead

I had a friend who really regretted using his savings to try and bootstrap businesses though, since he was still working at Amazon in his 60s

Re: Boards are dangerous to founder/CEOs

#48

Post by rsweeney21 »

I always thought stuff like this happened to OTHER founders, but would never happen to me. But my board fired me six months after closing our series A.

The advice in this article is 100% spot on. I didn't know any of this. I was totally focused on building my company. But if you raise money you can't do that anymore. 50% of your time will always be occupied with working on your next round of funding or managing your board of directors.

I noticed super early that VCs were not "helpful" at all like they had claimed during the fundraising process.

So I got fired, and I thought, "well, at least I still have my founders stock!"

Then a year after I got fired the series A investor led the next round of funding and decided to value the company at $0, so I got diluted by 99.99%. Sounds illegal, right? Well, it probably was, but what am I going to do about it? They have billions of dollars and I had no money.

I just let it go and started something new - bootstrapping of course. On the bright side, the new CEO ran the company into the ground. Meanwhile my new company is doing well and I love my job.

Anyway, do what this guy says to manage your board and just plan on being fired at some point if you raise VC money.

Re: Boards are dangerous to founder/CEOs

#49

Post by Digory »

Never stand between people and a pile of money.

Your Board doesn't fire you when you're the best guide to a pile of money. Your Board will fire you if they think you're slowing their progress toward a pile of money.

If you think your skills as a guide to piles of money are imperfect, don't put your life in the hands of people who need you to rapidly increase their pile of money.

Re: Boards are dangerous to founder/CEOs

#50

Post by VRay »

ganeumann wrote: post #40
throwaway55421 wrote: post #6

If you give up your 51% share, sure.

Very few things in a VC-backed startup require a shareholder vote. Firing the CEO is not one of them (this is a board vote.) Electing directors to the board is not one of them (this is usually the subject of a voting agreement that ensures board representation by the VCs.) Let's say the company raises money from VC1, who buys 20%, leaving you with 80%. The contracts add VC1 and an independent to the board, alongside…

How does that work? Couldn't you fire the board and reinstate yourself if you wanted to at that point?
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