as a founder, will you worry about the venture capital to replace your position? You should have this concern, it is possible that one day you will be replaced.
recently, a good relationship with my CEO was fired by his VC. Oddly enough, the VC did not say to the rest of the board. The board disagreed, so he wasn’t fired.
in a startup, the CEO was replaced and fired, not every day, but it often happens.
let’s take a deep look at the content.
first of all, if your CEO is really bad, can not complete the company’s mission, and others can be completed, then you should not be replaced?
second, in the long run if you can’t be a great CEO, while others may be in the next stage to do better than you, you should not be replaced? So you as a shareholder can earn more money than
you may agree with the above two theories, but you are particularly worried about the mid gray zone. Over the years, you have put 110% effort. The company’s business is also good, at least not closed down. You don’t think anyone can do it better. However, there are still a lot of people who want to take your place.
Although this is not always the case with
, it does happen.
so, how can you protect yourself?
please try the following six steps:
shares do not sell too much. This is the most critical tip. Simply put, you sell shares to other people means you give up control of the same proportion. If you sell only 20%-30% of the company’s shares, because you do not need so much money, you have control of the law and practice. If you sell more than 90% of your equity, you lose control. This is fair. Because in a legal sense, it’s not your company.
choose your trusted VC to get him into the board, especially in the early stages of VC. This should last a long time. If you have the right person, if you have multiple VC to invest in your company, you should do a background check. Do a background check on a single partner, not just a company.
view VC track record in A wheel, B wheel and C wheel. Do they have a high frequency of replacing CEO? If they replace a lot of CEO, you can imagine your own situation.
open and transparent. Don’t hide the board. Every VC will invest a lot of poor performance or failure of the company. The simple thing is, you can send it on the first day of each month