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topicprinter · 5 years

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good evening fellow redditers!tks in advance for reading the following tale and for any advice you may have! buckle up, its a long one (although hopefully our collective wisdom can come up with a few lesson to help others).---So, 2.5years ago i joined a startup active in the autonomous robotics field, focused in increasing efficiency in renewable energy maintenance and ops. Clearly, a very specific niche, completely b2b and whose clients are ultimately rather large organizations - but in a very "exciting" and "upcoming" tech space blending hardware/software, iot, etc...The company actually began 4 years ago by a friend of mine who was solo founder, but backed by a public-private investment firm that only funds renewable-related startups - (apparently this made valuation go from 0 to 1M kind of "magically", before any prototype or really, any actual product work was started. clap-clap?).As the entrepeneur in this case had a science background (i myself am a business major and have worked in different countries, for organizations of different sizes, and had my own business in the past) we actually spoke at length during the process he went through setting up the business, getting his first coupe engineers, and actually having an MVP. When he needed to create a board of directors, he asked me to join, as his "delegated" director (4 members, founder has casting vote).At that moment, the company started getting its first enquiries from potential clients, and since they could finally afford paying a salary, i was invited to "officially" join the pre-client, pre-revenue startup as their "COO" (LOL, i know! :D wtf does that mean anyway!?).The actual job was to ensure all the daily operations of the business run smoothly. This meant creating and maintaining systems from acc/fin to HR admin/hiring to marketing to ops, and I even helped in the tech/IT admin side as I find that calming! :) I thought "hell, why not? these guys may actually be on to something but they clearly dont know a lot abt running a business, and i know i can help" - so i said yes, even though pay was shit (literally minimum wage!!!) and NO EQUITY WAS OFFERED AT THE TIME (the usual "lets talk about it latter" scenario... i think you may know where this is going now! :D)After i joined the company (sept 2016), we won a few awards and grants, from applications/submissions i wrote (and stellar pitches given by the founder/ceo!!), got our first client (i went to a different continent to deliver the 20k usd kit to equip the client's robots and link up to our software, then did it again last xmas when his operation doubled in size) and hired a few more engineers. Tech wise, we're still using 2 year old version in "production" - suffice to say shit runs on ubuntu 14!!! theres only 3 engineers fulltime, all above average, but only 1 (!!!) is actually a computer scientist, the other are engineers who code... but the product does work, we've served over 1000 "units" of it, and feedback from industry has been pretty great (although its clearly still seen as a "nice to have" and not a "must have" kind of solution)Fast forward to 2019 and the company is kind of stuttering even though we had our best year last year in revenue (100k,,, :/) and have actually signed up two new clients in Q1 - but the industry is moving fast, our CEO spent most of last year depressing about a failed fundraising round, then on a "startup accelerator" program abroad to "recover his mojo",,, and finally the competition has MUUUUCH deeper pockets (couple of companies,, have raised dozens of millions from vc and work with some of the same enterprise clients we have). Basically he spends most of his time selling, as he should, but unfortunately most of it is spent selling chunks of his company, rather than his companies products/services. In the meantime, I've actually been crazy busy building his business, haven't taken a proper holiday since I joined (literally, 4 days off in 2.5 years!!) and never felt this close to burnout (but im a horse,,, and can handle it "well"-ish. just gimme my caffeine!)"Fortunately", there finally seems to be a new investor in the picture, and a binding TS has been signed for a 1M round at aprox 4M valuation. (YAY??). Now here's where the fun stars,, right? Well, in truth, the 4x members of the core team, myself included (but excluding the CEO and current 66% (!!) owner) have been feeling increasingly uneasy with the "overworked and underpaid, but too busy to talk about equity" routine and have started to care less and less - at least, i see clear signs of this in the team. I've brought it up with the CEO and he seems to think that its "my opinion" and that "the team is fine"... so, after much talking and little doing over the years (everyone is always "so busy",,,,) CEO finally found sometime to prepare a 7 slide presentation that concluded with a table that was borderline funny, if it wasn't so tragic!!He listed our 4 names in the columns (myself, and the 3 engineers, which he now deems the "core employees", and the rows were: "percentage of my equity", "money value of that equity" and "cash bonus". The percentages was around 4% each,, then he had the nerve of multiplying that by the valuation of the upcoming round (!!!) and presenting us a dollar value in the hundreds of thousands... the cash bonus row on the other hand read "8 thousand". The "cherry" on the cake? 50% of the shares on offer were actual shares, from his stash... the other 50% were actually to come out from a "to-be-created-eventually" esop, WITH TWO YEAR VESTING!! :D:D:D:D:D:DNaturally, I left that meeting and went on a two-week "vacation" immediately.Which brings us to the present day. I came back from holidays, all is "business as usual" he keeps saying that "end of next month" the deal should close (and paperwork signed,, making us 4 "official shareholders", and "getting a Mill in the bank", while "maintaining control" (barely,, like 50.01% counting with us 4). We are about to start another season of field operations, meaning ill be out of the office most of the time actually "bringing home the bacon", while him and the engineers keep "daydreaming" next-version-features back in the office.Ok, now, all bitterness aside (hard, yes, but i think I can do it), i actually think this is mostly just the work of an unseasoned and naive entrepreneur, who CLEARLY, has never done, nor thought abt any of this before (before going on holiday, i told him to read "hard thing about hard things", which he actually did for once - first business book he has completed in years!!! likes to say hes a "slow reader"!!!) - and NOT the work of some evil genius visionary. The team is almost as "oblivious", none of the engineers ever heard or really understood what an esop even is!! (ye, have i mentioned we're a loooooooooong way from silicon valley here?)Which brings me to my options:A) "fuckit!" you know how Jared from Silicon Valley always has his resignation letter ready to hand in!?! :D well, I've been carrying one in my pocket for the two weeks I've been back. Just need to date and sign it and done! but there goes the 1%, give or take, of common stock i'd end up owning after this round. Then go start/join new projects in completely different industries, etc.. (is the ICO craze still going on!?!?! :D)B) "take a job with the competition" Im pretty sure I can walk into a job with one the leading competitors, at the middle-management level. funny thing is that job would pay me around 5x what i take home today as "COO" :D However, that would get me back to working for "the man", which is exactly what I thought I was "escaping" from when I joined this startup! :PC) "show him how its done!" Not being one that likes to admit defeat, I thought if there are any "checkmate" moves available to me. Here's what I came up with.. (warning: the following is VERY Machiavellian! :D) Remember how I said the whole team is pretty inexperience? well, turns out neither the company name, nor the main brand that the company uses was ever registered neither in the US, nor in the EU, only in home country. I can incorporate a delaware company using the name of his company (but that name is then "taken" for business, as a japanese company owns that trademark), then register the trademark of his company's product name (which is available also for incorporation), then buy a bunch of related domains and URLs - perhaps even file a utility patent, just for that "patent pending" stamp :P. Then I could either turn around to his company's competition and offer this corporation (effectively blocking his entry into US market without a major rebranding/marketing/legal costs) or offer it back to his company - for the 10% total ownership he should have offered me in the first place!! (im cheap, i know! ;)D) ... you tell me... how do i keep my dignity, not to mention my motivation, to stick with this prototype of a company when clearly, the owner is looking for employees and staff,,, not co-owners and partners?et pour la piece du resistance*,*the CEO and I are high school friends, have been in each others lives for decades, and very much enjoy each other's company outside the professional setting. I actually "miss" just hanging out, as you can imagine this whole mess has put quite the strain of the friendship. There's a saying in a funny language,, that translates to smtg like "you can lose the friend, but you can't miss the joke". Ideally, I'd like to keep the friend, but the joke DEFINITELY won't be on me...ok,, you did it! thanks for reaching ::: THE END ::: go get a cookie before you get busy replying! you deserve it!! :DHave a great weekend!---TL,DR? hmmm founder of startup i helped build to 100k revenue over last 2.5 years offered me less than 1/5 of the amount ive put in sweat,, a.k.a abt 0.5% at NEXTs rounds valuation

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