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Boards are dangerous to founder/CEOs

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Re: Boards are dangerous to founder/CEOs

#61
post #47

Earlier quoted context omitted.

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 rea…

If a person has enough experience at contracting to lean on that reliably, or enough skill to earn ~$80k-$100k per year (to build enough savings quickly for a good runway), then it's definitely not the ideal route to pull a part-time $15/hr type job (it'd be a waste of time).

And it only works well for younger people without a family, as it'll involve 70-80 hours of work per week (at least in the beginning).

It's a poor(er) person's scenario. It's what I might do if I were 19-21 years old again. Back then, circa 1999-2001, I did a lot of web development contracting to fund building things I wanted to build with the rest of my time. It was a quite unreliable path though, as some months were flush and others were bleak. Poor people in that scenario usually don't have degrees from nice universities, they often can't easily get good engineering jobs early on. And if they have an aversion to working for other people/companies, as I always have, then that complicates the context further (CVS & Co are mostly drone jobs; POS, scan bar codes, greet customers, bag items, stock shelves, repeat; and it might help reduce development burnout, as it gets you away from code and out of the house). If you're young'ish, poor'ish and without a ton of experience, it provides a highly workable avenue to go after building a thing you want to build, self-funded, while cutting out the need for early outside capital (the need to give up a piece of your soul to the sharks).

Re: Boards are dangerous to founder/CEOs

#62

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…

Of course, I invite readers to treat Carl Jung quotations as having a credibility proportional to the amount of efforts he made during his life to properly prove and establish the facts he was enunciating: not much.

Re: Boards are dangerous to founder/CEOs

#63
post #50

Earlier quoted context omitted.

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?

Ask Rogers, the board just tried to fire the CEO, the CEO just tried to fire the board, but those elections happen at a different time, and the CEO need the trustee of the family shares to agree.

It can happen

Re: Boards are dangerous to founder/CEOs

#64
post #42

I'm happy and appreciative that this advice exists, but as a tech person who just wants to build new things, it makes running a company sound like a massive drain on the psyche.

You can always choose not to take on investments that relinquish your control.

Re: Boards are dangerous to founder/CEOs

#65
This brings memories. I also got „asked to leave“ after raising our first round.

I was young (25) and naive, with no experience in business within the family. But what was really crucial back then was that I lacked a mentor who’d make me aware of the risks before letting the sharks in.

It took me three years to bounce back and start something new. On the positive side, I learned a lot.

Re: Boards are dangerous to founder/CEOs

#66

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…

That's so sad but also super impressive. I'm not sure if you are ready to but may we know your current and previous startups.

https://www.linkedin.com/in/rsweeney21/

Re: Boards are dangerous to founder/CEOs

#67

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…

Who was your investor? So other startups know who to avoid.

Re: Boards are dangerous to founder/CEOs

#69

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…

I’ve been doing a lot of research on debt as an alternative to VC. A ton of options out there. Keeping notes here for anyone interested https://www.trypaper.io/

Just be aware with debt there are other forcing functions at play

Re: Boards are dangerous to founder/CEOs

#70

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…

>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%

Was it made impossible for you to be an investor in that round? Could you have prevented 99.99% dilution that way?

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