What happens when non-founders take over a start-up?
Shit hits the fucking fan..
Generally speaking, (especially early on) a company without it’s original founder is like a human without a soul.
It lacks substance.
It’s a soul-less, heartless, faceless corporation that’s lost all of it’s “start-up” appeal, excitement & allure.
There’s something magnetic about starting something. The chemistry only found in the early days. I guess it’s synonymous with the very concept of “creation” which is (in my mind at least) the foundation of life & all existence.
Fundamentally, we’re here to create — wether that’s procreate & have babies, or music, art, businesses & even wars.
Creation is in our DNA — and as a result, I believe it’s the key ingredient that makes a start up so appealing.
It’s the reason why people will leave high paying, secure jobs for the thrill of being involved in creating something that will make an impact in the world (of whatever sort).
What happens though, when the essence of that start up is removed?
What happens when the greedy, self centred interests of the corporate bureaucracy begin to guide the direction of that start up/fledgling business?
Some might say; “well, the start up is becoming a company — it’s growing up”. While there is truth in this, it’s not the camp I belong to.
We all know the most famous example of a founder being ousted, resulting in the company falling apart, only to have to bring the original founder back to revive it. Yep — you know exactly who & what I’m talking about; Steve Jobs & Apple.
Jobs was the original visionary. He was the heart & soul of that company, and whilst it’s true that his time away allowed him to mature & become the leader he was on his return — I stand by the fact that Jobs’ presence was what united the company & drove Apple forward.
A company is a group of people working together (ideally toward a common cause). A successful company is a group which does that with such passion, determintation & unity that they become unstoppable.
In fact, this is how start ups often take down the incumbents.
It’s this ethereal, intangible shit that makes the difference.
You can’t “measure” it, you can’t really define it & you can’t really systematically reporduce it because it’s not a fucking science. The early days are an art. They’re black magic. They’re a whole lot of shit going on at the same time, a form of controlled chaos, where the founder/leader’s role is to keep shit together until the crew makes it through the storm.
Yes. In some cases, there will come a time when the founder may no longer be the “CEO” or the key head figure or leader, and that’s fine — but such things come with their own natural rhythm and must be done amicably.
To (a) remove them from that post prematurely or (b) remove them from the company completely due to some bureaucratic or political reasoning will ultimately spell death for the company — especially if it’s still early days.
How can I be so sure?
Well — since I’m not publishing this now-I’ll state the date of this writing, and we’ll se what happens when I publish it later on down the track:
5:24pm 20th February, 2017
I was the ousted CEO, just one week ago. I apparently had the nerve to stand up for the team, my co-founder, for the vision & essence of the company I founder and ultimately for what I believed we stood for.
This was clearly in some form of conflict with the “unofficial board” and they chose to give me 10min to decide to resign, under duress, or they would quote; “force me out”.
It was one of those ugly displays of bureaucracy & sly politics, and it showed me how low some people can stoop when all they give a crap about is themselves.
After spending 2yrs building the company up, putting the team together, nurturing them, growing it, investing my time, money, effort & energy into it — I get forced out, without a cent to my name, nor a claim to any salary (I forewent my salary for the entire time to help extend our available cash) and only a“promise” of being allocated my shares — for which last night I was told the same “board” was going to try & strip me of via a ‘bad leaver’ clause in the shareholder agreement.
During last nights conversation, I also get told that “half the team needs to be cut” because we don’t have any money left. After these same morons (a) spent all the money the company had left on external consultants and paying, up-front, ALL the bills which I had placed on sustainable payment plans! I guess that’s what happens when you place in an inexperienced 27y/o accountant into the role of COO, CFO & Director of a company.
iRecruit (or whatever they’re going to name it) is on it’s death bed. The baby I spent 2yrs nurturing & bringing to a point where we had a real chance of success has basically been destroyed within a space of 10 days because the foster parents had no fucking clue what to do with it.
If they do succeed, it’s going to come as a result of me bending over & giving up a bunch of my shareholding just so that their greed can be satsified long enough for them to put more money in, retain whatever is left of the team & hopefully continue long enough to be able to sell the product, build some revenue & one day sell the business.
**I guess this turned into a bit of a rant! But hopefully the raw description reflects how I feel at the time of tis writing…
So what happens when non-founders take over a start up?
Chaos — but not the controlled or orderly kind — it’s the death rattle kind. It’s the end of the line. It’s as my dad would say; “goodbye charlie”.
I just hope that what I’ve written above will be proven wrong, for the good of the team and for the investors who recently put money in, backing myself as the CEO and the “team” that the company was built upon (and yeah, I’d like to one day also see something for all my hard work too).
- If you’re a founder, stick to your guns, keep your paperwork & legals in order, and pick your “board” carefully.
- If you’re a board member / mentor / advisor / investor — don’t be fucking stupid & don’t let your own greed, arrogance & need for self-preservation get in the way of why you decided to back this founder in the first place.
- If you’re part of a startup, one of the team, back your founders (unless of course they’re a complete douche bag, in which case none of the above applies). Just remember the sacrifice, time & effort they’ve put in, along with (in most cases) the fact that they’ve entrusted you enough to share their baby with you. It’s a special thing & if you guys remain united, you will go far.
It’s the 4th April 2017. What happened?
Greed took over. Those who took over managed to spend all the money left in under 6wks. They fired the entire team. They’ve put the company into administration. The result? None of the original founders or team are getting the shares or stock options originally promised; in fact, everyone gets zero.
From the sounds of it, they are pheonixing into a new company under the name of “Whozwho”, and using the old design framework & IP that the original team worked so hard to create to continue on their own path & keep the entire company to themselves.
So that’s what happens when you the corporate bonobos take over..
***Update*** 20th April 2017
I hope this story, as raw as it is, will help give some insight to others now raising capital & putting a board together to beware of the potential dangers of raising too early, of selection and of alignment.
I can look back on it now with a very different depiction. I’m no longer bitter at the experience — in fact — I can honestly say that it’s been a blessing in disguise. It’s allowed me to move onto a new project with the insight & flexibility I need to operate more in my modality.
I wish my previous “adversaries” all the best & hope they succeed, mostly because most of the investors that got caught up in that debacle were innocent parties, and I hope they can turn it into something.
They take over the previous — you move on & build a new Kingdom.