Just because it’s our startup doesn’t mean we still have upside in it.
Anyone who’s taken on a single round of capital and has suffered the painful dilution that comes with has had the first taste of “reduced upside.” We accept it though, like taking awful medicine because we know it’ll make things better in the end. But at some point that medicine stops working.
At some point, we look around and realize that our startup no longer provides the kind of upside for us we thought it would. It was easy to overlook when we could see us “making billions” but now reality has set in and we realize we just have a really stressful job that pays us way below market.
Call it What it is
First off, we have to call it what it is — a shitty deal. Is it a shitty deal of our own making? Sure, but that doesn’t make it any less shitty of a deal.
Every person sitting in the cap table from the first angel investor to the last employee we hired is evaluating their personal benefit of this relationship — we should be no different.
But we don’t think like that. We create this self-imposed shackle that tells us we have to accept our fate and eat crow because it’s our own design. That’s just simply not true. But to do something about it, we first have to call it what it is — a shitty deal that we need to unwind.
Founders Require Incentive
Every single person in the company is driven based on incentives. No one invested in our startup through cash or time for charitable purposes. Our incentive structure as Founders is no different. At which point our incentives have been reduced to the point where we’re not driven, it’s a problem.
The challenge is that as Founders no one tells us this. No investor is going to pull us aside and say “Hey Serena, I’m looking at the cap table and I really don’t think there’s enough stock for you to get more engaged for the long term — here’s some of mine!”
Yet that’s exactly the kind of conversation that needs to happen, but it can only happen if we start the conversation. Most Founders don’t even realize they are allowed to have this conversation, to begin with!
Bad Deal, New Job
Just because we started this thing doesn’t mean we are chained to it. If the deal sucks for us, we can leave. Ideally, we’d negotiate a better upside before we took that position (we should always try!) but if we feel like the opportunity for us is horrible, it’s time to go.
Yes, Founders, we can quit our jobs. We can find new opportunities that are better aligned with our upside potential. If the good folks around us don’t want to provide those incentives, then we are free to pursue them elsewhere.
There’s no nobility in running ourselves into the ground. We owe it to ourselves to align our lives with the opportunities that best suit us — even if they aren’t at our own startup.
