Ask HN: CTO wants me to leave
129 comments
The question I would try and answer if I were in your shoes is the following:
Does he want me to leave the company or does he want me to stop writing production code for the product?
If its the first one, there is likely a personal issue between the two of you that needs to be resolved one way or another.
If you think the second option is what he is really trying to communicate, then I would look for other opportunities to contribute to the company. It sucks to grasp your own limitations and admit that you might not be a good enough coder to contribute to the product at this point, but this is a critical time for the future of the product. Any technical debt acquired at this phase of development is going to be very costly to pay off later since you are developing the core of the system.
However, you are a founder of the company, and I am assuming very passionate about the company's mission as well as financially motivated to see this thing through. There are tons of jobs that will need to be done as you guys grow, and each one of those is an opportunity for you to contribute above and beyond what a new hire off the street could accomplish. A lot of those jobs can also take advantage of your coding skills to either automate processes or utilize your deeper understanding of how the product works to better support it.
This is of course assuming that you guys have the cash in the bank to pay you for this work, if that is not the case then the situation is a little trickier and you will have to explore other options.
Does he want me to leave the company or does he want me to stop writing production code for the product?
If its the first one, there is likely a personal issue between the two of you that needs to be resolved one way or another.
If you think the second option is what he is really trying to communicate, then I would look for other opportunities to contribute to the company. It sucks to grasp your own limitations and admit that you might not be a good enough coder to contribute to the product at this point, but this is a critical time for the future of the product. Any technical debt acquired at this phase of development is going to be very costly to pay off later since you are developing the core of the system.
However, you are a founder of the company, and I am assuming very passionate about the company's mission as well as financially motivated to see this thing through. There are tons of jobs that will need to be done as you guys grow, and each one of those is an opportunity for you to contribute above and beyond what a new hire off the street could accomplish. A lot of those jobs can also take advantage of your coding skills to either automate processes or utilize your deeper understanding of how the product works to better support it.
This is of course assuming that you guys have the cash in the bank to pay you for this work, if that is not the case then the situation is a little trickier and you will have to explore other options.
agree completely. I'd have a frank discussion with him and attempt to determine if this is political. If it is, fire him immediately even if there's short-term pain because the politics will fk the company anyway.
If it's not political, and you agree with his assessment of your production code, then there's an R&D role that probably needs filling and that you've already proven you can do - finding profitable market niches and creating prototype products/services to address them.
Don't sweat being a "bad coder". Every coder (yes, even the awesome ones) feels a little worried that their code is bad, and he's just playing on this insecurity that we all have. Part of the 'your code is crap' syndrome we see in tech is just defensive projection.
You managed to build a production system that is gaining traction, which is amazing. Go do more of that :)
If it's not political, and you agree with his assessment of your production code, then there's an R&D role that probably needs filling and that you've already proven you can do - finding profitable market niches and creating prototype products/services to address them.
Don't sweat being a "bad coder". Every coder (yes, even the awesome ones) feels a little worried that their code is bad, and he's just playing on this insecurity that we all have. Part of the 'your code is crap' syndrome we see in tech is just defensive projection.
You managed to build a production system that is gaining traction, which is amazing. Go do more of that :)
I'd second your words about "bad coder" arguments. This argument is ridiculous, particularly if he had managed to to build a production system that is gaining traction. And did it single-handed (or in a team of two).
I would disagree however about the advice to 'fire him immediately because the politics will fk the company'. The problem is, the moment there is some money on the table politics and power play starts. Unavoidable.
I would disagree however about the advice to 'fire him immediately because the politics will fk the company'. The problem is, the moment there is some money on the table politics and power play starts. Unavoidable.
You can be a terrible coder and build an MVP in PHP or something. Doesn't mean you can scale it, both in terms of adding new features, or in terms of increased traffic.
Um. That kind of thinking is pretty close to my own from some years back. Not any more, but who knows, I may change my way of thinking again ;) In the moment I'm just reserving my judgement regarding skills of other developers. And only make judgements regarding particular pieces of code, mostly trying to find positive things in it, rather than negative ones.
Out of curiosity, a personal question. In terms of years of active software development, what's your level of experience? Is it say, 20 years of building code for moneys? Two times less than than? Two times more? You don't have to answer.
Out of curiosity, a personal question. In terms of years of active software development, what's your level of experience? Is it say, 20 years of building code for moneys? Two times less than than? Two times more? You don't have to answer.
About 20 years, yes.
There's nothing bad about being a terrible coder who manages to put together a basic product. There are plenty of terrible musicians who still release albums for example. But it takes wisdom and maturity to understand ones own limitations.
If I owned 50% of a company, and a guy who had measurably increased my wealth by improving the product and hence the value of the company, gave me some advice like this I would listen very carefully. I would not "cut off my own nose to spite my face" or "throw the baby out with the bathwater".
There's nothing bad about being a terrible coder who manages to put together a basic product. There are plenty of terrible musicians who still release albums for example. But it takes wisdom and maturity to understand ones own limitations.
If I owned 50% of a company, and a guy who had measurably increased my wealth by improving the product and hence the value of the company, gave me some advice like this I would listen very carefully. I would not "cut off my own nose to spite my face" or "throw the baby out with the bathwater".
Interesting. Well, my current way of thinking is that there are no terrible coders, it is just that mature and experienced engineers are slightly less prone to making terrible and difficult to correct mistakes. Like using an obscure language or something, just because they feel that way and without considering the implications ;)
I disagree, somewhat :-) There are people whose contribution is horrible but it's rarely confined to the quality of their code. It's more about being able to lead the company in directions that are ultimately wasteful in some way or other and not being able to change direction when the time is right. That leadership may be expressed in code, but the code is as much or more a symptom than the root cause.
With basic QA practices in place (peer review, coding standards, designs grokked by teams not individuals etc.) a single person usually can't muck up the codebase very badly. He or she can still poison a whole project or company.
With basic QA practices in place (peer review, coding standards, designs grokked by teams not individuals etc.) a single person usually can't muck up the codebase very badly. He or she can still poison a whole project or company.
Well, my understanding is that developer's experience changes the shape of the probability distribution of excellent/horrible contributions. But it is always a distribution. And that it is difficult to accurately distinguish between excellent/horrible contributions without hindsight.
I find that as I get more experienced, I'm more aware of how much of this huge discipline I don't know, and how many mistakes I've made in the past, and I'm much less likely to call myself a "good coder".
When I was younger and slapping shit together any old how, I thought I knew it all.
When I was younger and slapping shit together any old how, I thought I knew it all.
There are, apparently, those who cannot implement FizzBuzz. Perhaps it's incorrect to call them "coders". But beyond that, you have a spectrum of skill. Do they become competent before they become coders in your books?
I take it you've never had to work with bad code. It's ruinous to the company's prospects since it slows everyone down and makes' developers lives miserable until they quit. It starts to take an entire afternoon to make a simple change, and your business is paralyzed.
+1 on all pointers. That's what his co-founder is supposed to say. Unfortunately, failing to support each-other in such ugly cases, says much about the future (or the lack of one) of this partnership. :(
> If you think the second option is what he is really trying to communicate, then I would look for other opportunities to contribute to the company.
This was my thought. It would be worth looking into roles like developer evangelist, if it makes sense for your company: you're clearly technical enough to make things happen, and you have the domain knowledge to be very useful.
This was my thought. It would be worth looking into roles like developer evangelist, if it makes sense for your company: you're clearly technical enough to make things happen, and you have the domain knowledge to be very useful.
I agree with you. Of course, I don't know the full story but given what I have seen in the past I would guess it's the second option.
Some of the coders simply can't deal (or, more accurately, their egos) when someone less skilled is above them in the hierarchy.
If this is the case, I'd say just fire him. It sucks now, but will save from a lot of pain later on. For instance, when you hire someone else who might happen to be less skilled than the CTO.
Good software developers know that there are less skilled people, they used to be like them, and deal with that appropriately (i.e. with respect and without offending). And then there are prima donnas who can't deal with working with another human being for whatever the reason is.
At the end of the day, being a good software developer is not all about writing code. Far from it.
Some of the coders simply can't deal (or, more accurately, their egos) when someone less skilled is above them in the hierarchy.
If this is the case, I'd say just fire him. It sucks now, but will save from a lot of pain later on. For instance, when you hire someone else who might happen to be less skilled than the CTO.
Good software developers know that there are less skilled people, they used to be like them, and deal with that appropriately (i.e. with respect and without offending). And then there are prima donnas who can't deal with working with another human being for whatever the reason is.
At the end of the day, being a good software developer is not all about writing code. Far from it.
I was under the impression that "co-founder" carried a lot more weight than CTO; is this not the case? My gut feeling was that, if I were in the co-founder's shoes, I'd fire the CTO immediately.
This would be dumb though, because it would tank your company.
Leaving the situation as-is would tank that company.
In a small team, infighting is a much bigger threat to survival than losing skills/results of any single individual.
In a small team, infighting is a much bigger threat to survival than losing skills/results of any single individual.
Hmm, I'm sure infighting is bad, but often enough individuals do have skills and in particular experience with the setup and/or code and/or business contacts that the startup has made that you're not going to find a replacement nor train one without losing lots of time and money. Certainly that's an avoidable risk with effort, but I'm pretty sure that some level of infighting may be less risky than losing certain individuals.
You are assuming that the CTO is the only CTO in the world.
A CTO with polarized vision would tank the company faster.
So, if that would tank the company noone gets nothing. If he doesn't fire the CTO, he gets nothing and company may or may not get anything. To me, pretty clear situation what would I do. I would risk the company to save myself from certain loose.
> I was under the impression that "co-founder" carried a lot more weight than CTO
Depends on the circumstances. If one founder controls a majority share, they can fire anyone they wish.
In this current situation, if the CEO controls more than 50% of the shares and the CTO reports directly to the CTO, the CTO can fire the OP.
Depends on the circumstances. If one founder controls a majority share, they can fire anyone they wish.
In this current situation, if the CEO controls more than 50% of the shares and the CTO reports directly to the CTO, the CTO can fire the OP.
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I agree completely.
Listen Eduardo Saverin:
FIRST THING GET YOUR OWN LAWYER AND TALK TO THEM NOW!
The key question here is : do you have equity, and how much equity do you have in percentage terms?
If you are an equal cofounder, then when someone turns up and says "you have to leave cause better people have been employed", you say "fuck off". Think about it - EVERY company that grows will employ people who are better than the cofounders in some way, that is the whole point. You are the FOUNDER, you brought value to the company early. Just because smarter or more experienced people have been employed in no way devalues what you did in the early stages. In fact this is PRECISELY what is meant to happen. Do you think that Zuckerberg is the best developer at Facebook - legend may say so but it's not true - can't be. So should Zuck be fired cause he's not their strongest tech guy?
You also need to think separately about your rights as employee and rights as a shareholder/owner - they are not the same thing. You DO have clear contracts as both employee and shareholder DON'T YOU? Those contracts specify (or should specify) your rights.
And who the fuck does this guy think he is that he can tell a cofounder to leave? You are his BOSS.
DO NOT LEAVE. And if you do leave, DO NOT SELL YOUR SHARES IN THE COMPANY - just say "I want a MASSIVE payout to accept being fired, and I WILL NOT sell my shares as part of settlement". Hang on to those shares because now these guys are going to do all the hard work in growing the company and you can chill out and do other things and when they IPO, you'll take home your share. And if this is the path you take, look out cause some time in the future they will try to play a legal game in which you hang on to your shares but they get diluted down to almost nothing. This cannot happen if you are careful to look out for it.
This is all on the assumption that you do have equity and contracts in place. If you don't, then you should go and watch "The Social Network" repeatedly until you learn your lesson.
FIRST THING GET YOUR OWN LAWYER AND TALK TO THEM NOW!
The key question here is : do you have equity, and how much equity do you have in percentage terms?
If you are an equal cofounder, then when someone turns up and says "you have to leave cause better people have been employed", you say "fuck off". Think about it - EVERY company that grows will employ people who are better than the cofounders in some way, that is the whole point. You are the FOUNDER, you brought value to the company early. Just because smarter or more experienced people have been employed in no way devalues what you did in the early stages. In fact this is PRECISELY what is meant to happen. Do you think that Zuckerberg is the best developer at Facebook - legend may say so but it's not true - can't be. So should Zuck be fired cause he's not their strongest tech guy?
You also need to think separately about your rights as employee and rights as a shareholder/owner - they are not the same thing. You DO have clear contracts as both employee and shareholder DON'T YOU? Those contracts specify (or should specify) your rights.
And who the fuck does this guy think he is that he can tell a cofounder to leave? You are his BOSS.
DO NOT LEAVE. And if you do leave, DO NOT SELL YOUR SHARES IN THE COMPANY - just say "I want a MASSIVE payout to accept being fired, and I WILL NOT sell my shares as part of settlement". Hang on to those shares because now these guys are going to do all the hard work in growing the company and you can chill out and do other things and when they IPO, you'll take home your share. And if this is the path you take, look out cause some time in the future they will try to play a legal game in which you hang on to your shares but they get diluted down to almost nothing. This cannot happen if you are careful to look out for it.
This is all on the assumption that you do have equity and contracts in place. If you don't, then you should go and watch "The Social Network" repeatedly until you learn your lesson.
"Do you think that Zuckerberg is the best developer at Facebook - legend may say so but it's not true"
What is this legend? I think everybody is aware of the fact that the infrastructure that allowed facebook to scale was not (and probably could not have been) built by Zuckerberg. He had guys like Adam D'Angelo working for him from the beginning.
What is this legend? I think everybody is aware of the fact that the infrastructure that allowed facebook to scale was not (and probably could not have been) built by Zuckerberg. He had guys like Adam D'Angelo working for him from the beginning.
The employees of tech companies with charismatic leaders sometimes elevate their Great Leader to legendary status in their field of expertise, whether its true or not. Worshipping is part of the tech company cult thing - you do see the parallel of course with cults and tech firms? There will be plenty who believe the Zuck is the best coder there or amongst the best at least.
He's more like the Bill Gates of the company. Has serious technical chops, and knew that technical thing like scaling were not optional. Compare to the object lesson of competitor Friendster, where the people running it after they ousted the computer programmer founder ignored that minor detail....
> And who the fuck does this guy think he is that he can tell a cofounder to leave? You are his BOSS.
This is the key point. OP founded the company. Presumably he has close to a 50% equity stake. There are other CTOs available -- ditch this one you can't trust immediately.
This is the key point. OP founded the company. Presumably he has close to a 50% equity stake. There are other CTOs available -- ditch this one you can't trust immediately.
It looks like you have real equity in the company and there is possible traction in the business.
You are a co-founder. That counts for a lot. I am also assuming that your equity stake is significant.
First of all, deal with this right now. Don't wait for the 3-6 months. You are basically being told that once they have raised money, they will find a way to get you out. Right now, it's a fishing expedition between the CTO and the other founder. Will you be a nice gentle person and go along with their approach or are you going to turn into an attack dog.
You likely have tremendous leverage right now due to this funding round coming up. They will not want to rock the boat. But this is exactly when you should be doing it as I don't believe the "we need you" bit means anything other than "we don't want you to fk up our funding round coming up".
At the end of the day, if they really want you out, they'll find a way to do so. The main thing is that you got to get on the offensive and make sure if you do end up leaving the company, you've left on the best financial terms possible for yourself. Make them pay. In fact, throw out a number you are comfortable with and have them pay you out from that in the next funding round.
If you approach this as "what's best for the company", you have already lost because that's not what this CTO and your other founder are approaching this from.
EDIT: You should provide some more detail on the equity position you have and how formalized it is (ie. proper contracts). Being a co-founder isn't about just writing code. As others have said, if you have significant equity, you have a lot of power. Don't underestimate this.
You are a co-founder. That counts for a lot. I am also assuming that your equity stake is significant.
First of all, deal with this right now. Don't wait for the 3-6 months. You are basically being told that once they have raised money, they will find a way to get you out. Right now, it's a fishing expedition between the CTO and the other founder. Will you be a nice gentle person and go along with their approach or are you going to turn into an attack dog.
You likely have tremendous leverage right now due to this funding round coming up. They will not want to rock the boat. But this is exactly when you should be doing it as I don't believe the "we need you" bit means anything other than "we don't want you to fk up our funding round coming up".
At the end of the day, if they really want you out, they'll find a way to do so. The main thing is that you got to get on the offensive and make sure if you do end up leaving the company, you've left on the best financial terms possible for yourself. Make them pay. In fact, throw out a number you are comfortable with and have them pay you out from that in the next funding round.
If you approach this as "what's best for the company", you have already lost because that's not what this CTO and your other founder are approaching this from.
EDIT: You should provide some more detail on the equity position you have and how formalized it is (ie. proper contracts). Being a co-founder isn't about just writing code. As others have said, if you have significant equity, you have a lot of power. Don't underestimate this.
That's a good point: They don't want to you to leave now, so leverage that. But this situation is not fixable by staying at the company. Recognize the CTO and CEO want you leave when it's convenient for them, and that's it's probably a personal issue, they probably don't like,working with you or else they would've suggested some other role for you. So find a way to leave now with your equity intact, with the help of a lawyer.
It also might depend if they were smart and have a vesting schedule for everyone. But that also means pushing people out may be selfishly advantageous in the short term, so it really matters to have known your cofounders long before the current venture.
First off, I'm sorry about your situation. Nobody here will be able to judge with any degree of accuracy whether he has a point. I personally would not look at this situation as a technical one; this is a business relationship situation.
Regardless of whether there is any grain of truth, the CTO has lost confidence in you. Not just a little bit. He has asked you to leave. The rest of my advice assumes the CEO (your co-founder) has quite a bit of confidence in the CTO. If that is the case, I'm not quite sure you can come back from having the CTO asking you to leave, nor am I certain you should.
I think it would be advisable to talk to a lawyer to see how you can cleanly and professionally leave on your own terms. Save the emotional stuff for friends and your alone time. You will no doubt need to grieve (this was your baby). But I think it would be better for you to be proactive about leaving and professionally extract yourself from this situation. That said, make sure you know your rights and what your contracts entitled you to in such a situation.
Once extracted, take your hurt pride and prove them wrong.
Regardless of whether there is any grain of truth, the CTO has lost confidence in you. Not just a little bit. He has asked you to leave. The rest of my advice assumes the CEO (your co-founder) has quite a bit of confidence in the CTO. If that is the case, I'm not quite sure you can come back from having the CTO asking you to leave, nor am I certain you should.
I think it would be advisable to talk to a lawyer to see how you can cleanly and professionally leave on your own terms. Save the emotional stuff for friends and your alone time. You will no doubt need to grieve (this was your baby). But I think it would be better for you to be proactive about leaving and professionally extract yourself from this situation. That said, make sure you know your rights and what your contracts entitled you to in such a situation.
Once extracted, take your hurt pride and prove them wrong.
Thank you for taking the time to respond.
> The rest of my advice assumes the CEO (your co-founder) has quite a bit of confidence in the CTO.
This is the case, it is in my interest however to remain in the company because my equity is vested, the sooner I leave the less I will get in return, apart from my time, and opportunity cost I invested all my personal wealth.
> The rest of my advice assumes the CEO (your co-founder) has quite a bit of confidence in the CTO.
This is the case, it is in my interest however to remain in the company because my equity is vested, the sooner I leave the less I will get in return, apart from my time, and opportunity cost I invested all my personal wealth.
Your question and many of the comments so far tend to focus on the CTO. I'd like to focus on your co-founder, the "CEO".
If he wanted to start with a less-experienced technical person, and jettison them early on -- he could have hired an employee and paid them.
Instead he co-founded with you, as a partner. He was happy to take your money -- you have skin in the game. He doesn't get to shoo you out the door now like a temp.
He also doesn't get to do it via the CTO. He owes you a frank conversation. Also you need a lawyer.
tl;dr: From hearing your side of the story, although the CTO is handling this like a tool, the CEO is the biggest schmuck.
If he wanted to start with a less-experienced technical person, and jettison them early on -- he could have hired an employee and paid them.
Instead he co-founded with you, as a partner. He was happy to take your money -- you have skin in the game. He doesn't get to shoo you out the door now like a temp.
He also doesn't get to do it via the CTO. He owes you a frank conversation. Also you need a lawyer.
tl;dr: From hearing your side of the story, although the CTO is handling this like a tool, the CEO is the biggest schmuck.
I agree with this point. The CEO does just what he was told to. I assume he's just an employee without ownership, and employees don't fire owners unless someone much stronger is behind them.
Definitely lawyer up, that would be a first thing. Then, if you want to regain control about he company, consider CEO your enemy, not the CTO. Invent a reason and fire the CTO, if you can do it. Then, step up as CTO yourself, or at least hire a person you trust. Then, hire COO, CFO, CMO. Make sure those are people that are loyal to you and where each one will take over one of the CEO responsibilities. At the latest stage, let those people document every mistake of CEO, and you try to push him out together with C team and investors.
That's exactly what he is doing to you. He convinced you to voluntarily step out from CTO position and hired his tool. Now, your chances to fight back are much worse from this position, but the war is not yet over.
So, lawyer up, read Machiavelli, know your enemy and fight fire with fire. Remember, the CEO that did this to you is not your friend anymore, and deserves whatever you do to him.
Definitely lawyer up, that would be a first thing. Then, if you want to regain control about he company, consider CEO your enemy, not the CTO. Invent a reason and fire the CTO, if you can do it. Then, step up as CTO yourself, or at least hire a person you trust. Then, hire COO, CFO, CMO. Make sure those are people that are loyal to you and where each one will take over one of the CEO responsibilities. At the latest stage, let those people document every mistake of CEO, and you try to push him out together with C team and investors.
That's exactly what he is doing to you. He convinced you to voluntarily step out from CTO position and hired his tool. Now, your chances to fight back are much worse from this position, but the war is not yet over.
So, lawyer up, read Machiavelli, know your enemy and fight fire with fire. Remember, the CEO that did this to you is not your friend anymore, and deserves whatever you do to him.
Personally, i consider this bad advice. Fighting is never really a good thing. SO please don't start a civil war, all it will do is destroy the company. The whole vengeance thing is very counter productive. I'd say lawyer up to get compensation and not to take revenge. And then leave and find a place where you are more appreciated. perhaps focus your energies on something new , something productive
It depends. Is company worth fighting for? What would be your share if you keep your part of the slice? If that is bigger than compensation you would get, than it certainly is worth fighting for. It's not about vengeance, it's about founders own interests, even if that would make company worse off.
45% share of 100M$ worth company is still much more than 10% share of 200M$ worth company or 1M$ compensation. You are not fighting to optimize for the company success, you are fighting to optimize your own wealth. If the company gets destroyed, and you still manage to get more then what would be your compensation package, you are still better off then retreating. Why caring about the company that doesn't benefit you, you would certainly not enjoy the success of the company that squeezed you out.
So yes, lawyer up and fight if it's worth to you to fight for the control. Don't be emotional about he company and business. It's your weakness, and they are already playing on that.
45% share of 100M$ worth company is still much more than 10% share of 200M$ worth company or 1M$ compensation. You are not fighting to optimize for the company success, you are fighting to optimize your own wealth. If the company gets destroyed, and you still manage to get more then what would be your compensation package, you are still better off then retreating. Why caring about the company that doesn't benefit you, you would certainly not enjoy the success of the company that squeezed you out.
So yes, lawyer up and fight if it's worth to you to fight for the control. Don't be emotional about he company and business. It's your weakness, and they are already playing on that.
Well as someone here pointed out, the whole fighting thing is toxic. It even marks YOU for the rest of your career. You can't just go to everyone and say "he started it!". outsiders would see BOTH of you as dangerous, and would likely avoid working with you. So it's more of a suicide mission really
> I invested all my personal wealth.
I think this is being overlooked. You invested all your personal wealth into this company and in return you got unvested shares?
I think this is being overlooked. You invested all your personal wealth into this company and in return you got unvested shares?
This right here. The money OP invested -- whether hard cash, or equivalent deferred pay or both -- should have resulted in direct, fully vested stock, just as it does for angels and VC's. (to clarify: it should vest at the rate that the work is performed, not over some arbitrary schedule).
There's this underlying meme in our community that "elbow grease" investment -- working for low pay, no benefits, rejecting other career opportunities -- is somehow worth less than an investor's cash. IMSHO, it's just the opposite -- cash typically doesn't draw down one's pool of emotional well-being and spirit the way hard work does. Work investment should be rewarded with a premium, not treated as somehow less than just money.
There's this underlying meme in our community that "elbow grease" investment -- working for low pay, no benefits, rejecting other career opportunities -- is somehow worth less than an investor's cash. IMSHO, it's just the opposite -- cash typically doesn't draw down one's pool of emotional well-being and spirit the way hard work does. Work investment should be rewarded with a premium, not treated as somehow less than just money.
What I don't get; shouldn't it already have vested if he is a founder? I'm not sure about the system there but when I found a company those shares are mine?
The advice has been given several times, on HN, that founders should vest, so that you don't need to claw back 1/3 the company from a founder who walks away a month in.
This is sane advice if you're playing the standard VC game where you shop around for a co-founder, raise funds, and build a product (not necessarily in that order).
OP's situation sounds more like a bootstrapped small business where he invested his life savings and blood/sweat/tears. I'm not sure that vesting shares is ideal there -- perhaps a well defined shotgun clause or similar is more reasonable to handle unruly founders.
OP's situation sounds more like a bootstrapped small business where he invested his life savings and blood/sweat/tears. I'm not sure that vesting shares is ideal there -- perhaps a well defined shotgun clause or similar is more reasonable to handle unruly founders.
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If you can come to some agreement with the CEO/CTO, it's possible to accelerate a portion of your vesting for your departure. Or, since you said they want to wait until the company raises funding, you could negotiate some other kind of severance.
Either way, if possible, figure out a compromise which feels fair for everybody involved. This doesn't need to be completely one-sided.
Either way, if possible, figure out a compromise which feels fair for everybody involved. This doesn't need to be completely one-sided.
This.
Being asked to "leave in 3-6 months" is the new CTO's opening gambit in the negotiation you're about to start.
Your _worst_ negotiating option will be to say "OK, bye".
Work out what you want.
Work out your best idea of what the CTO/company wants (depending on what you want, the first step here is most likely to be asking them outright - if what you want most is to get rid of this CTO, this step will need to be approached much more subtly and delicately, and probably with someone much more experience helping you out).
Work out some "next best alternatives" to your optimal outcome, and what you'd accept as compensation for agreeing to those non-optimal alternatives.
Mostly though - work out what _you_ want - and why, and once you've done that, look at it with the most objective view you can and determine if it's actually plausible and realistic. (To be honest, a guy who wasn't even writing tests a few months ago _isn't_ going to be the technical lead or chief architect of an enterprise software startup - at least not a startup with a high chance of succeeding or getting serious funding. Be realistic here.)
If it's just the vesting(/money) - you'll negotiate one way. It's it's actually an ego/ownership/founderdhip issue for you, then acknowledge that (at least to yourself) and work out how to negotiate your desired outcome while keeping that perspective firmly in mind (and seriously, think about whether you need to rethink that - if it's mostly an ego thing).
Being asked to "leave in 3-6 months" is the new CTO's opening gambit in the negotiation you're about to start.
Your _worst_ negotiating option will be to say "OK, bye".
Work out what you want.
Work out your best idea of what the CTO/company wants (depending on what you want, the first step here is most likely to be asking them outright - if what you want most is to get rid of this CTO, this step will need to be approached much more subtly and delicately, and probably with someone much more experience helping you out).
Work out some "next best alternatives" to your optimal outcome, and what you'd accept as compensation for agreeing to those non-optimal alternatives.
Mostly though - work out what _you_ want - and why, and once you've done that, look at it with the most objective view you can and determine if it's actually plausible and realistic. (To be honest, a guy who wasn't even writing tests a few months ago _isn't_ going to be the technical lead or chief architect of an enterprise software startup - at least not a startup with a high chance of succeeding or getting serious funding. Be realistic here.)
If it's just the vesting(/money) - you'll negotiate one way. It's it's actually an ego/ownership/founderdhip issue for you, then acknowledge that (at least to yourself) and work out how to negotiate your desired outcome while keeping that perspective firmly in mind (and seriously, think about whether you need to rethink that - if it's mostly an ego thing).
For what reason would the OP need to negotiate with the CTO?
You need to sit down in a room with the CEO and CTO, and have the CTO describe his concerns and then you can all resolve the issue together. For the sake of the culture of the company you can not let this slide as back-room talk, as that would create a poisonous culture. When that is answered talk to a lawyer before signing any papers, and remember that the companys lawyers are obligated to protect the company and not your interests so really get your own laywer.
I don't know exact your situation but I saw similar case. In summary, the founder who showed support to company without ego made company successful, not the CTO or VP engineering who joined later stage. That’s your baby, but to CTO, that’s neighbor’s. You are happily clean up your baby’s diaper or mess, while neighbor will blame you and not clean up. If you need process to get enterprise ready, you can hire process guy and experienced enterprise software guy and adjust your team. I think when CTO say it to you, he have talked CEO already. In that case, if CEO is mature, CEO should stop CTO blame you and discuss that matter with you first. If you are not sure about CEO’s intention, you should talk him and understand about it. In this case, I feel that CTO have hired couple of his guys and they are all point same direction. But don’t be afraid those and think whether you still can help company or not. (I think you still can help company) you should talk to CEO and let him know that company need you for technical evangelist or customer meetings or … and at last as back up to CTO. (For me, It seams CTO is a type of guy who build castle inside house, which will cause problem soon within organization.) By the way, you should consult with the lawyer if possible, and understand what you can get worst case.
You can simply tell him that you'll leave if you get the rest of your vested stock, of if you get a new position as an "advisor" that allows you to stay on at a low salary until your stocks have finished vesting. If he really wants you out he'll find a way to make it happen, and if that way is writing a check instead of dealing with a bunch of drama he'll probably take it.
> it is in my interest however to remain in the company because my equity is vested
This is negotiable. But you shouldn't necessarily be the one to negotiate it, so you should probably start talking to your own lawyer (not the company's).
This is negotiable. But you shouldn't necessarily be the one to negotiate it, so you should probably start talking to your own lawyer (not the company's).
> apart from my time, and opportunity cost I invested all my personal wealth.
You can try to negotiate a settlement (still consult a personal lawyer) of retaining some of your money put in (maybe after they receive investment) as well as an additional accelerated vesting of a small part of your remaining unvested shares. You still have some rights to make a big stink about all of this, but I wouldn't advise trying to stay on. You may end up with nothing and have burnt some bridges with the CEO and future investors.
You can try to negotiate a settlement (still consult a personal lawyer) of retaining some of your money put in (maybe after they receive investment) as well as an additional accelerated vesting of a small part of your remaining unvested shares. You still have some rights to make a big stink about all of this, but I wouldn't advise trying to stay on. You may end up with nothing and have burnt some bridges with the CEO and future investors.
Is he/she an employee or a third partner?
The questions you want to be asking are to a lawyer regarding corporate law given your current situation. (Talk to your own lawyer, not the company lawyer who represents the company and not your interests as a shareholder)
I would work on retaining control of the company and your shares, possibly isolating the CTO in terms of power, if not outright dismissal.
The CTO is way out of line speaking to a board member, and majority shareholder like that. I assume you are a director and hold ~50% of the company in addition to a few of the officer positions in the company. Utilize corporate law to eliminate risk to your portfolio.
The tech shit is completely irrelevant, you should be discussing with the other shareholders how out of line the CTO is and your contingency plan for dealing with officers who are not respectful of the owners of the company.
Also check whether the company owes you any debt, if the other founder can't come up with the money you could also use debt to take control. Again, talk to a lawyer, and keep in mind that it doesn't matter if the company tanks if you're not going to be part of any success it has. Scorched earth the mother fucker if no one wants to play ball. (Shareholder and board meetings can be a great way to get internal feuds into the corporate minute book)
Do you think anyone at Facebook cares that Mark Zuckerberg is not their top coder? (And even if he was do you think that the best value he could provide to the company would be from writing code?)
I would work on retaining control of the company and your shares, possibly isolating the CTO in terms of power, if not outright dismissal.
The CTO is way out of line speaking to a board member, and majority shareholder like that. I assume you are a director and hold ~50% of the company in addition to a few of the officer positions in the company. Utilize corporate law to eliminate risk to your portfolio.
The tech shit is completely irrelevant, you should be discussing with the other shareholders how out of line the CTO is and your contingency plan for dealing with officers who are not respectful of the owners of the company.
Also check whether the company owes you any debt, if the other founder can't come up with the money you could also use debt to take control. Again, talk to a lawyer, and keep in mind that it doesn't matter if the company tanks if you're not going to be part of any success it has. Scorched earth the mother fucker if no one wants to play ball. (Shareholder and board meetings can be a great way to get internal feuds into the corporate minute book)
Do you think anyone at Facebook cares that Mark Zuckerberg is not their top coder? (And even if he was do you think that the best value he could provide to the company would be from writing code?)
Stay for the 3-6 months, until you get your stake sorted, then get out in time before the shit hits the fan. Don't bother trying to reconcile relationships, don't get involved in the politics. It's a shame it's turned out this way, but by the sounds of it, it's not worth it. gone sour. There'll be another opportunity elsewhere for sure.
He's trying to fuck you over. Remind him that he works for you, not the other way around. Start looking for his replacement. Check with a lawyer about the security of your own stake and make sure you are good with the business guy, because the CTO has probably been whispering poison in his ear about you.
+1 he works for you. He's got you ready leave because you doubt your abilities. It's one thing if your company needs all rock star engineers to make a product push but if it was that I'm sure you'd see it that way. That's an opportunity for you to shift focus to something else but it just doesn't sound like that. It sounds like he's trying to get rid of a technical founder. Don't let him.
yep and depending on your product, you might not even need a CTO until way later. Your ability to deliver a working product quickly and measure it's performance (metrics wise) is way more important than writing the best code evar.
> .. the CTO has probably been whispering poison in his ear about you.
This just has to be true.
This just has to be true.
FWIW, he may just have been saying exactly what the OP says himself:
"I have improved significantly in the last few months from where I was (generally unstructured development, no tests, poor formatting / naming etc., but functional, generally coding to working with others instead of by myself) but he has said that it's not enough.
We have hired another coder who I get along well with and I have learned from."
There's quite possibly a good argument to be made saying "this guy shouldn't have commit access to our code base" and it's not beyond the bounds of reasonableness to read into that "a few mid level developers under normal CTO oversight will give us a much better starting codebase than this guy is likely to deliver without significant extra training and experience".
Not saying that's definitely the case, but it's certainly plausible. (And I've seen it before, more than once... Hell, I've _been_ "that guy" myself, back in the day.)
"I have improved significantly in the last few months from where I was (generally unstructured development, no tests, poor formatting / naming etc., but functional, generally coding to working with others instead of by myself) but he has said that it's not enough.
We have hired another coder who I get along well with and I have learned from."
There's quite possibly a good argument to be made saying "this guy shouldn't have commit access to our code base" and it's not beyond the bounds of reasonableness to read into that "a few mid level developers under normal CTO oversight will give us a much better starting codebase than this guy is likely to deliver without significant extra training and experience".
Not saying that's definitely the case, but it's certainly plausible. (And I've seen it before, more than once... Hell, I've _been_ "that guy" myself, back in the day.)
It's one thing to say 'to be honest Bob, your code is pretty messy...' I'd have no problem with that, indeed as CTO it is part of his job to be honest and say that something should be rewritten or someone with deeper experience brought in to work on part of it if that's what's going to make the product better.
But it's another thing entirely to be telling a founder that they should be leaving. This is saying 'not only are you not good enough to write the production code, you're so awful that you shouldn't even be involved in the company you founded any more,' as if the OP has no possibility of developing him/herself as an owner of the business.
But it's another thing entirely to be telling a founder that they should be leaving. This is saying 'not only are you not good enough to write the production code, you're so awful that you shouldn't even be involved in the company you founded any more,' as if the OP has no possibility of developing him/herself as an owner of the business.
We took commit access away from our CEO once (who was also an owner). It was fine.
The fool who tells the business owner that he should probably leave _his own business_ may as well go and tie the noose to hang himself because that's what he's doing here.
Fuck what is right, fuck what the CTO thinks. The business owners always have the last say. This CTO is toast.
The fool who tells the business owner that he should probably leave _his own business_ may as well go and tie the noose to hang himself because that's what he's doing here.
Fuck what is right, fuck what the CTO thinks. The business owners always have the last say. This CTO is toast.
but the CTO wouldn't be saying that unless there was another "conversation" out there. Why is this guy CTO anyway while a Co-owner is left at coder? You don't bring somebody in as "CTO" without a promise of a cut of the pie... and that cut is going to come from you obviously.
> He's trying to fuck you over.
Do you always assume people are full of malice based on one side of the story or...
Do you always assume people are full of malice based on one side of the story or...
I would be pissed that out of a four "man" team (2 founders, 2 employees) that the first employee would have the gall to ask them to leave. How is this acceptable? Only in the world of companies seeking funding.
If the CTO came and said hey in 6 months I think we should discuss you stepping away from coding and into a new role. I wouldn't want to hear it but if they told me to leave my very small company I would think they crossed a line. The CTO maybe management but he isn't the owner.
If the CTO came and said hey in 6 months I think we should discuss you stepping away from coding and into a new role. I wouldn't want to hear it but if they told me to leave my very small company I would think they crossed a line. The CTO maybe management but he isn't the owner.
In this sort of circumstance, yes. There's no other justification for the actions they're taking and the manner in which they're taking them. The CTO is pursuing a course contrary to the OP's own interests. He need to take this seriously and start talking to his attorney.
You have phrased this as an almost apologetic post, focusing on your ability to write code. An analogy to medicine might be worrying about your ability to take a good history and physical exam, but in the meanwhile the patient is bleeding in front of you.
The problem is not your ability to write code - the CTO even admits as much when he says he needs you now but wants to replace you later. Your code is desperately needed. But I don't really care about this.
Assuming a normal situation, the company is yours and your co-founder's (by ownership), and the CTO likely has a small amount of equity (relative to yours). In an early stage company that hasn't yet raised money, your company is basically an extension of yourself. You don't have responsibilities to shareholders or employees because you don't have either yet. You have a responsibility to yourself and your vision. The CTO did not found the company and that alone tells you that you have some amount of vision, ability, or ability to take advantage of chance that he did not have.
If you want to remain involved in the company, and it seems that you do and should, then you need to clarify for the CTO where the boundaries of his responsibilities lie. His job is not to ask you to quit, and he may be beyond the point where you can continue working with him (or not - I don't know enough detail). But if he is to continue working for you (and do recall that he works for you at your pleasure), he needs to focus on solutions that don't involve him trying to fire you.
Most founders don't end up coding very much after their companies grow, and the CTO may be hopeful to get more experienced programmers working for the company. But there are about 10,000 miles in between "we should hire people with deep experience in X" and "I want you to leave the company." The latter is a political gambit that needs to be dealt with after careful consideration in a way that shows teeth.
The problem is not your ability to write code - the CTO even admits as much when he says he needs you now but wants to replace you later. Your code is desperately needed. But I don't really care about this.
Assuming a normal situation, the company is yours and your co-founder's (by ownership), and the CTO likely has a small amount of equity (relative to yours). In an early stage company that hasn't yet raised money, your company is basically an extension of yourself. You don't have responsibilities to shareholders or employees because you don't have either yet. You have a responsibility to yourself and your vision. The CTO did not found the company and that alone tells you that you have some amount of vision, ability, or ability to take advantage of chance that he did not have.
If you want to remain involved in the company, and it seems that you do and should, then you need to clarify for the CTO where the boundaries of his responsibilities lie. His job is not to ask you to quit, and he may be beyond the point where you can continue working with him (or not - I don't know enough detail). But if he is to continue working for you (and do recall that he works for you at your pleasure), he needs to focus on solutions that don't involve him trying to fire you.
Most founders don't end up coding very much after their companies grow, and the CTO may be hopeful to get more experienced programmers working for the company. But there are about 10,000 miles in between "we should hire people with deep experience in X" and "I want you to leave the company." The latter is a political gambit that needs to be dealt with after careful consideration in a way that shows teeth.
>You have phrased this as an almost apologetic post
And I bet this is why the CTO has taken the path that they have. They sense the same thing that we sense from the tone of this comment so they are going after that perceived weakness.
And I bet this is why the CTO has taken the path that they have. They sense the same thing that we sense from the tone of this comment so they are going after that perceived weakness.
I am a very easy going guy who dislikes confrontation, I also assume the people I am working with are my peers, and treat them as such.
Hi! I'm the same way. That's an excellent attitude to take with people who behave well. But for those who don't, you have to fight them. Certainly for yourself. But if you want to found companies, you're going to have to learn to fight for everybody. Because otherwise one person who enjoys confrontation can make your company a nightmare.
So if you're reluctant to fight for yourself, fight for your colleagues, current and future. And honestly, I think it's good in the long term even for the people you're fighting. To be happy, we all need to learn to respect other people.
So if you're reluctant to fight for yourself, fight for your colleagues, current and future. And honestly, I think it's good in the long term even for the people you're fighting. To be happy, we all need to learn to respect other people.
Being a doormat is not a virtue. You are never wrong for standing up for yourself. It is the other person who was wrong from the start to try to walk all over you. Deference is not the same thing as respect. Everyone deserves respect, always, but they almost never deserve deference.
FWIW I am more like you. I prefer to work with people like you and most of my colleagues are like this. However, when you are dealing with people that are NOT like this (and there are many of them out there), you have to change your game or get out of the game they are playing. It sucks but there are a great may people in the professional world that have no problem with conflict or that view "nice" people as weak people. Doesn't mean you have to change who you are but you would be well advised to change how you deal with this sort of person or they will walk all over you and not be bothered in the slightest by it.
Most people assume their colleagues are their peers. Not all management people though, but that's the best type of CEO/CTO an employee could have IMO.
You need to grow a pair or you'll be crushed by people like this.
I don't know anything about business or founding a startup: but as an engineer in one, if you have hired a CTO who is better at engineering than you (kudos!) and he/she has asked you to stop writing production code, you should listen. Coding "for old times sake" is pretty damaging when a team of actually trained engineers has just got your old broken code-base under control and instituted better engineering practices. This is part of the typical startup lifecycle: the code that got you here isn't going to get you to the next place, and it's your job to find, hire and enable better engineers to get you to the next level.
But if he actually is asking you to leave the company? He can fuck himself. But seriously, if it is clear that you are hurting more than helping by writing code, please stop. Keep learning, and ease into contributing again slowly.
But if he actually is asking you to leave the company? He can fuck himself. But seriously, if it is clear that you are hurting more than helping by writing code, please stop. Keep learning, and ease into contributing again slowly.
> if you have hired a CTO who is better at engineering than you
He doesn't do development himself(he does review everything before it goes into the production branch), simply that he knows better developers than I.
I have re-written much of our original code to a point where it is of good quality, both in it's intended role and in readability.
I did have a habit of cutting corners which later came back to bite us but that is not the case anymore.
He doesn't do development himself(he does review everything before it goes into the production branch), simply that he knows better developers than I.
I have re-written much of our original code to a point where it is of good quality, both in it's intended role and in readability.
I did have a habit of cutting corners which later came back to bite us but that is not the case anymore.
Danger Will Robinson---what? He doesn't code?
I shouldn't judge from a piecemeal HN post. But the picture I'm getting is "Know-it-all Javatecht VP of Enterprise AbstractFactoryCorporateWarfareObject Development."
Here's some news: there's no such thing as a CTO (or for that matter, CEO) in a four-perspn company. It's cargo-cult status-seeking: the CTO of $BIG_CORPORATE where I used to work was rich and important, so I'll give myself the same title and I will be too. What's missed is that the actual status comes from having humans to boss around. So in a startup titles are basically equity: worthless until we're profitable.
Fire the CTO. He doesn't code, he's causing problems. If you really need him for his experience with "Enterprise-ready," hire him on a consulting basis for a few hours a week to tell you what to google. But if he's not coding...what is he doing?
I shouldn't judge from a piecemeal HN post. But the picture I'm getting is "Know-it-all Javatecht VP of Enterprise AbstractFactoryCorporateWarfareObject Development."
Here's some news: there's no such thing as a CTO (or for that matter, CEO) in a four-perspn company. It's cargo-cult status-seeking: the CTO of $BIG_CORPORATE where I used to work was rich and important, so I'll give myself the same title and I will be too. What's missed is that the actual status comes from having humans to boss around. So in a startup titles are basically equity: worthless until we're profitable.
Fire the CTO. He doesn't code, he's causing problems. If you really need him for his experience with "Enterprise-ready," hire him on a consulting basis for a few hours a week to tell you what to google. But if he's not coding...what is he doing?
Hmm, how big is this company? I can't imagine a startup with a CTO that doesn't actually doing any coding until well beyond the bootstrap stage, this seems odd to me.
Unless your are failing to get your code working there is almost no good reason to tell you to leave, this seems like some sort of power play. I would tread carefully if I were you. Even if they did decide it's better off without you "Expect to leave in 3-6 months" is a giant WTF? Why tell you now unless they are going to sweat you to give up equity. Telling you you aren't a good coder is a good way to get you to feel like your contribution to the company is less than it really is, but it sounds to me like you must have done all the work. Even if this CTO helped with the scope and guidance to get everything going better, what would they have if you took all your work and left with it? (Not saying you should try that, just realize how much of what is important did YOU actually create) Unless almost everything you've done is getting thrown out, you are probably undervaluing your contributions, from what you've said.
Good luck.
Unless your are failing to get your code working there is almost no good reason to tell you to leave, this seems like some sort of power play. I would tread carefully if I were you. Even if they did decide it's better off without you "Expect to leave in 3-6 months" is a giant WTF? Why tell you now unless they are going to sweat you to give up equity. Telling you you aren't a good coder is a good way to get you to feel like your contribution to the company is less than it really is, but it sounds to me like you must have done all the work. Even if this CTO helped with the scope and guidance to get everything going better, what would they have if you took all your work and left with it? (Not saying you should try that, just realize how much of what is important did YOU actually create) Unless almost everything you've done is getting thrown out, you are probably undervaluing your contributions, from what you've said.
Good luck.
So, a CTO at an early stage startup who can't be bothered to code wants to oust a co-founder?
If true, that's beyond absurd.
If true, that's beyond absurd.
Wait, what? You're less than 20 people and the CTO doesn't write code? That's news, and weird in all ways. Danger ahead!
But there are many things I assume in this story. Is everyone full time? How many people are there? How much of your money/time so far versus other money? Did the other founder have the same vesting schedule? Are there Angel investors? Is the CTO a friend of your co founder or other investor? There's too much unknown here. Make sure you answer all of this for your own lawyer!
The "better developers" sound suspiciously like unemployed friends of his.
That's pretty sleek. He is in a rather powerful position then.
How? I would have thought that the improved and existing code base being my work would strengthen my hand.
No offence but you seem a little naive and/or inexperienced. In addition to the strong recommendation to get your own lawyer now, I would suggest you read "The 48 Laws of Power" by Robert Greene to get a crash course in things people do to try to obtain power. You may begin to see the CTO in your situation in a different light.
HINT: This has nothing to do with your coding ability
HINT: This has nothing to do with your coding ability
You need to hire an attorney, one who works in business litigation (if you can find someone specializing in minority shareholder disputes, that much the better). Right now. If you're delaying on this point out of some idea of wanting to "try to fix things first" or "not wanting to be the bad guy," you're just shooting yourself in the foot and downing blood thinners to keep the wound from clotting. Working with an attorney is not the same as filing suit, and you will never be worse off in this sort of situation for having sought outside counsel. You also need to find your own attorney; the company's counsel works for the company itself, not for any of its investors, executives, or employees.
Judging from your story, your situation is pretty clear: you're being squeezed-out. Sadly, it's not uncommon. Though he might not be asking you to leave right now, framing it as in a few months is just an effort to (i) get some additional benefit out of you, and (ii) give them the time they need to break you.
There are two possibilities right off the bat: (i) the CEO is involved, which is likely given the difficulty involved in squeezing-out a shareholder + 50% co-founder; (ii) the CTO is working alone, hoping to push you out the door and benefit in some way from the resulting vacuum. In either case, you can't move forward without speaking to an attorney. And don't you dare think for one second that you can "just talk to the CEO first."
Already, you're talking about things as an employee rather than an owner. That's your first mistake. An employee might be able to be kicked to the curb, but you're not just an employee. You've already made a significant investment into the company, and from their perspective, an ideal/successful squeeze-out is one that deprives you of that ownership interest entirely. Most of these efforts are successful because they manage to position the person being targeted in a position where they just roll over. Ideally, they force the person being squeezed out to choose to quit rather than actually be fired. It seems like that's the CTO's goal in your situation.
That said, there are few programmers, in my opinion, whose work is so bad that there is zero potential for future improvement. Considering the costs of pushing you out, you'd have to be doing a hell of a lot more than just writing shit code to justify termination. Given that they want to wait until after additional fundraising rounds are completed, I doubt that your involvement with the company is nearly so problematic. Besides, you already stated that there's been a clear improvement in your code.
I was in a similar situation, once. I was foolish, stupid, and trusted a friend I've known for years. I did the development work, partner A brought his business skills and industry contacts to the table along with his money (and a third partner, B, as well). Did the work, but during that time, there was no sight of their money. One of the earliest clues I was going to be screwed was, when discussing fundraising, A mentioned his own deferred pay. Something I thought slightly peculiar given that he was supposed to be investing his own, significant funds along with B. Plus, I don't believe that he actually did any measurable work during the time period that would justify it based on what I knew at the time. Investors are rightly finicky about deferred salaries, and the bar is pretty high to justify them.
When we were at the end, I found myself being squeezed-out: in the end, they apparently figured that it'd be cheaper to outsource to some ridiculous "startup in the box" type of company rather than deal with my deferred pay and the long-term consequences of a third founder's ownership interests) even though doing so would delay things by a couple of months. They even managed to time things well: the weekend of my grandmother's funeral, after A had been told about it, they dropped their little bomb on me. The only good thing was that they walked away without getting a single line of code that I'd written.
My parting was anything but on good terms. Eventually, I wound up not pursuing the matter in court--talking it over with my attorney, it became quite clear that the legal fees of fighting them would be ruinous. That partner C was a shyster of an attorney, and all evidence suggested that they'd just try to wait out the expensive clock rather than consider settling. After all, the cost of doing so would be pretty minimal. Litigation is uncertain and expensive. Painful though it may be, you never ever litigate on principle. Not if you have any brains at all.
Even though I would have likely prevailed given the facts, I would have come up horribly in the red when it was done. A pyrrhic victory and no more. Choosing not to go down that route was one of the harder decisions of my life, made all the more difficult by the knowledge that they had, quite literally, taken even my grandmother's funeral away from me.
Oddly enough, I'm probably better off for it now that I have some distance and perspective to look back. When they launched, it was unobserved and uneventful. Even now, they're unknown with almost no traffic and engagement. They've also made a number of bad mistakes that I had identified--often through trial and error--that I had told them about. It was a submarine rigged for silent running, deep and quiet, that's never bothered to surface for air. All of partner A's vaunted experience and extensive media contacts in the industry proved for naught in the end. Eventually, they'll simply wither and die on the vine. Had they not squeezed me out, no doubt I'd still be hanging on trying to turn things around. After all, who abandons a friend? It was quite the learning experience, albeit an incredibly expensive one.
Luckily, you can avoid that sort of experience by acting now to protect yourself. Document everything, save all of your emails, chat logs, download and archive all Github comments on everything that you've worked on, as well as everything else you can. Make sure that you're also grabbing copies of emails off any servers/accounts they might have access to. Even though it will create problems if there's any litigation, there's a high likelihood that they'll do something foolish such as delete them.
You have a lot going for you right now that'll help you. First, you're obviously still needed to help their raise funds. Second, investors are scared to death of founder disputes. If any potential investors even sniff the possibility, they'll run and never look back while your current investors will raise holy hell, even if the CEO+CTO were able to find some fig leaf of justification. It also implies a deviousness that will scare investors; if they're willing to screw a friend and risk such a serious dispute, then it's also possible that they'll wander into similar situations in the future. Particularly in the early stages, investors and VC firms don't have to put up with that sort of bullshit.
This gives you an absurd amount of leverage: you have the ability to single-handedly kill their fundraising efforts now and in the future. You need to call your attorney and start using it. At the very minimum, it'll put the breaks on any plans they're currently working on. At best, it'll help you move forward as a company without having these sorts of problems lurking about in the shadows.
Judging from your story, your situation is pretty clear: you're being squeezed-out. Sadly, it's not uncommon. Though he might not be asking you to leave right now, framing it as in a few months is just an effort to (i) get some additional benefit out of you, and (ii) give them the time they need to break you.
There are two possibilities right off the bat: (i) the CEO is involved, which is likely given the difficulty involved in squeezing-out a shareholder + 50% co-founder; (ii) the CTO is working alone, hoping to push you out the door and benefit in some way from the resulting vacuum. In either case, you can't move forward without speaking to an attorney. And don't you dare think for one second that you can "just talk to the CEO first."
Already, you're talking about things as an employee rather than an owner. That's your first mistake. An employee might be able to be kicked to the curb, but you're not just an employee. You've already made a significant investment into the company, and from their perspective, an ideal/successful squeeze-out is one that deprives you of that ownership interest entirely. Most of these efforts are successful because they manage to position the person being targeted in a position where they just roll over. Ideally, they force the person being squeezed out to choose to quit rather than actually be fired. It seems like that's the CTO's goal in your situation.
That said, there are few programmers, in my opinion, whose work is so bad that there is zero potential for future improvement. Considering the costs of pushing you out, you'd have to be doing a hell of a lot more than just writing shit code to justify termination. Given that they want to wait until after additional fundraising rounds are completed, I doubt that your involvement with the company is nearly so problematic. Besides, you already stated that there's been a clear improvement in your code.
I was in a similar situation, once. I was foolish, stupid, and trusted a friend I've known for years. I did the development work, partner A brought his business skills and industry contacts to the table along with his money (and a third partner, B, as well). Did the work, but during that time, there was no sight of their money. One of the earliest clues I was going to be screwed was, when discussing fundraising, A mentioned his own deferred pay. Something I thought slightly peculiar given that he was supposed to be investing his own, significant funds along with B. Plus, I don't believe that he actually did any measurable work during the time period that would justify it based on what I knew at the time. Investors are rightly finicky about deferred salaries, and the bar is pretty high to justify them.
When we were at the end, I found myself being squeezed-out: in the end, they apparently figured that it'd be cheaper to outsource to some ridiculous "startup in the box" type of company rather than deal with my deferred pay and the long-term consequences of a third founder's ownership interests) even though doing so would delay things by a couple of months. They even managed to time things well: the weekend of my grandmother's funeral, after A had been told about it, they dropped their little bomb on me. The only good thing was that they walked away without getting a single line of code that I'd written.
My parting was anything but on good terms. Eventually, I wound up not pursuing the matter in court--talking it over with my attorney, it became quite clear that the legal fees of fighting them would be ruinous. That partner C was a shyster of an attorney, and all evidence suggested that they'd just try to wait out the expensive clock rather than consider settling. After all, the cost of doing so would be pretty minimal. Litigation is uncertain and expensive. Painful though it may be, you never ever litigate on principle. Not if you have any brains at all.
Even though I would have likely prevailed given the facts, I would have come up horribly in the red when it was done. A pyrrhic victory and no more. Choosing not to go down that route was one of the harder decisions of my life, made all the more difficult by the knowledge that they had, quite literally, taken even my grandmother's funeral away from me.
Oddly enough, I'm probably better off for it now that I have some distance and perspective to look back. When they launched, it was unobserved and uneventful. Even now, they're unknown with almost no traffic and engagement. They've also made a number of bad mistakes that I had identified--often through trial and error--that I had told them about. It was a submarine rigged for silent running, deep and quiet, that's never bothered to surface for air. All of partner A's vaunted experience and extensive media contacts in the industry proved for naught in the end. Eventually, they'll simply wither and die on the vine. Had they not squeezed me out, no doubt I'd still be hanging on trying to turn things around. After all, who abandons a friend? It was quite the learning experience, albeit an incredibly expensive one.
Luckily, you can avoid that sort of experience by acting now to protect yourself. Document everything, save all of your emails, chat logs, download and archive all Github comments on everything that you've worked on, as well as everything else you can. Make sure that you're also grabbing copies of emails off any servers/accounts they might have access to. Even though it will create problems if there's any litigation, there's a high likelihood that they'll do something foolish such as delete them.
You have a lot going for you right now that'll help you. First, you're obviously still needed to help their raise funds. Second, investors are scared to death of founder disputes. If any potential investors even sniff the possibility, they'll run and never look back while your current investors will raise holy hell, even if the CEO+CTO were able to find some fig leaf of justification. It also implies a deviousness that will scare investors; if they're willing to screw a friend and risk such a serious dispute, then it's also possible that they'll wander into similar situations in the future. Particularly in the early stages, investors and VC firms don't have to put up with that sort of bullshit.
This gives you an absurd amount of leverage: you have the ability to single-handedly kill their fundraising efforts now and in the future. You need to call your attorney and start using it. At the very minimum, it'll put the breaks on any plans they're currently working on. At best, it'll help you move forward as a company without having these sorts of problems lurking about in the shadows.
I'd go for a shorter version, but: yes, you are right on. Important points:
1. Have legal counsel
2. Deal with the issue now, not later.
I'd get a lawyer and fire the CTO. Small teams require absolute trust, and that is now breached. You'll find out in the process how the CEO aligns. Give your partner a heads up, but don't let yourself be moved from the task of firing the CTO.
1. Have legal counsel
2. Deal with the issue now, not later.
I'd get a lawyer and fire the CTO. Small teams require absolute trust, and that is now breached. You'll find out in the process how the CEO aligns. Give your partner a heads up, but don't let yourself be moved from the task of firing the CTO.
> I'd get a lawyer and fire the CTO.
You're jumping the gun.
First, the way that the OP has framed his story indicates that he's not sure how he wants the situation to be resolved. One of the first questions any good attorney will ask him is "How would you ideally like the situation resolved?" The attorney can suggest possibilities, but unless the OP knows what he wants, an attorney can only be of so much help.
Second, based on what the OP wrote, it appears that he does question his capabilities. He says he's "not the best coder" and refers to technical and project management "problems we were having" that ostensibly developed while he was leading the company's development efforts. This should not be overlooked.
Third, it's important to note that just because you're a co-founder doesn't mean that your employment can't be terminated, and just because your employment is terminated doesn't necessarily mean that you're going to be screwed out of what you have already earned. There's no indication here one way or the other that the OP's departure would involve funny business.
Finally, and most importantly, it's very unlikely that an experienced CTO would ask a co-founder to leave unless he had the support of the other co-founder. At the end of the day, if the OP's co-founder has lost confidence in him and doesn't believe that he can contribute to the company in other ways going forward, the OP has a very big problem that firing the CTO won't solve. The fact that the co-founder apparently hasn't delivered this message directly and tried to come up with an arrangement that allows the OP and the company to part ways cleanly and fairly suggests that the co-founder lacks the character and moral fortitude to lead a company.
The OP should have a conversation with an attorney, but he shouldn't forget about his opportunity cost. If you discover that you're not dealing with strong, ethical people, sometimes cutting your losses is the best approach. That can be hard to do, and it's not without risk, but people incapable of dealing honestly with their partners and employees, especially in difficult situations, don't usually have what it takes to build successful businesses anyway.
You're jumping the gun.
First, the way that the OP has framed his story indicates that he's not sure how he wants the situation to be resolved. One of the first questions any good attorney will ask him is "How would you ideally like the situation resolved?" The attorney can suggest possibilities, but unless the OP knows what he wants, an attorney can only be of so much help.
Second, based on what the OP wrote, it appears that he does question his capabilities. He says he's "not the best coder" and refers to technical and project management "problems we were having" that ostensibly developed while he was leading the company's development efforts. This should not be overlooked.
Third, it's important to note that just because you're a co-founder doesn't mean that your employment can't be terminated, and just because your employment is terminated doesn't necessarily mean that you're going to be screwed out of what you have already earned. There's no indication here one way or the other that the OP's departure would involve funny business.
Finally, and most importantly, it's very unlikely that an experienced CTO would ask a co-founder to leave unless he had the support of the other co-founder. At the end of the day, if the OP's co-founder has lost confidence in him and doesn't believe that he can contribute to the company in other ways going forward, the OP has a very big problem that firing the CTO won't solve. The fact that the co-founder apparently hasn't delivered this message directly and tried to come up with an arrangement that allows the OP and the company to part ways cleanly and fairly suggests that the co-founder lacks the character and moral fortitude to lead a company.
The OP should have a conversation with an attorney, but he shouldn't forget about his opportunity cost. If you discover that you're not dealing with strong, ethical people, sometimes cutting your losses is the best approach. That can be hard to do, and it's not without risk, but people incapable of dealing honestly with their partners and employees, especially in difficult situations, don't usually have what it takes to build successful businesses anyway.
A growing business could easily find a sinecurial position for a founder that had outgrown his or her usefulness: the only reason to jettison this guy in such an amateur fashion is to avoid paying his salary or position him for dilution in future funding rounds.
My guess is that the CEO is dealing with investor pressure and the CTO has been parachuted in by whoever is funding them, likely on the understanding that future funding is contingent on making the hire and "improving the team". The fact that they are worried about keeping him on through the next round suggests that these promises aren't even reliable. In which case this is a malevolent power play and there is no good reason for him to roll over -- the most likely outcome of this all is that the company dies.
And either way -- this is a really horrible decision on the part of the CEO as well. Because what happens to HIM once his technical cofounder is gone? He'll be reliant on raising capital to fund an even more expensive team and won't even have the option of saying no and going back to running the business with the original team, something which is the most likely GOOD outcome for any small business and the only option that gives them any real leverage against outside investors.
My guess is that the CEO is dealing with investor pressure and the CTO has been parachuted in by whoever is funding them, likely on the understanding that future funding is contingent on making the hire and "improving the team". The fact that they are worried about keeping him on through the next round suggests that these promises aren't even reliable. In which case this is a malevolent power play and there is no good reason for him to roll over -- the most likely outcome of this all is that the company dies.
And either way -- this is a really horrible decision on the part of the CEO as well. Because what happens to HIM once his technical cofounder is gone? He'll be reliant on raising capital to fund an even more expensive team and won't even have the option of saying no and going back to running the business with the original team, something which is the most likely GOOD outcome for any small business and the only option that gives them any real leverage against outside investors.
If the CTO is a pro, he had the support of the CEO and the investors (board of directors) before he ever brought it up.
don't let yourself be moved from the task of firing the CTO
Would that have a chance of ripping the company apart if the CEO was agreeing with the CTO? It seems like there's probably nothing to gain from the corpse of a company, so would it be better to avoid that?
Would that have a chance of ripping the company apart if the CEO was agreeing with the CTO? It seems like there's probably nothing to gain from the corpse of a company, so would it be better to avoid that?
He's not the only one who has to consider whether or not the company becomes a corpse in this situation though. Sounds like he's one of two founders, likely with some investors on board. All of these people (without the CTO who I'm guessing has no board seat and needs to shut up and learn his place) are tasked with ensuring the company has a future. Given that, the various parties are all equally responsible if they use this situation to tank the company.
If the CEO agrees with the CTO, then the company is dead.
It means the CTO is on a mission by the CEO, who was unable to speak directly with his cofounder.
It means the CTO is on a mission by the CEO, who was unable to speak directly with his cofounder.
> the company is dead.
No, it's not. It means the relationship between the cofounders is severely damaged. The company may be fine.
Everyone is making the assumption here that what the CTO is doing is wrong. It may have been the right thing to do for the company. It is just the wrong thing for the OP.
I think the OP should lawyer up, try to get fairly compensated for his contributions, and end the relationship.
Business is unemotional. Those that invest their life into a business are emotional. Be true to yourself and it is ok to love what you do and enjoy who you work with and what you work on, but when it comes down to it, it is a job. Founders are no more special than any others. As soon as you start making significant progress from idea to product, ensure that you have clear written contracts setup.
There should really be a site for those beginning their company that provides sample contracts and talk about about the pros and cons of each approach for ensuring that when relationships end, things are handled in manner civil and with prior understanding of how things work. It could only be a good thing, because the incentive will be there to work more effectively in order to contribute in a way that will end in value immediately and/or later, regardless of the outcome. There are a lot of people that specialize in helping people in this regard, but I can't think of a site that is specifically for the purpose I'm speaking of.
No, it's not. It means the relationship between the cofounders is severely damaged. The company may be fine.
Everyone is making the assumption here that what the CTO is doing is wrong. It may have been the right thing to do for the company. It is just the wrong thing for the OP.
I think the OP should lawyer up, try to get fairly compensated for his contributions, and end the relationship.
Business is unemotional. Those that invest their life into a business are emotional. Be true to yourself and it is ok to love what you do and enjoy who you work with and what you work on, but when it comes down to it, it is a job. Founders are no more special than any others. As soon as you start making significant progress from idea to product, ensure that you have clear written contracts setup.
There should really be a site for those beginning their company that provides sample contracts and talk about about the pros and cons of each approach for ensuring that when relationships end, things are handled in manner civil and with prior understanding of how things work. It could only be a good thing, because the incentive will be there to work more effectively in order to contribute in a way that will end in value immediately and/or later, regardless of the outcome. There are a lot of people that specialize in helping people in this regard, but I can't think of a site that is specifically for the purpose I'm speaking of.
> Everyone is making the assumption here that what the CTO is doing is wrong. It may have been the right thing to do for the company. It is just the wrong thing for the OP.
Barring the question of whether the OP is just lying about what's going on (so taking as given that the concerns raised are technical proficiency and that the CTO is asking the OP to leave the company and not just to lay off doing production coding work), I'm curious if you can explain under what circumstances this would be the right thing to do?
Undermining someone like this strikes me as probably almost never the right thing for the company. It's toxic and destroys trust in all directions.
Barring the question of whether the OP is just lying about what's going on (so taking as given that the concerns raised are technical proficiency and that the CTO is asking the OP to leave the company and not just to lay off doing production coding work), I'm curious if you can explain under what circumstances this would be the right thing to do?
Undermining someone like this strikes me as probably almost never the right thing for the company. It's toxic and destroys trust in all directions.
I want to highlight the trust issue. If there is an issue of trust, it must be dealt with immediately and decisively or the company will tank (and you don't want that because you want a successful business more than smug self-satisfaction).
I'm reading the two stories completely differently:
In the OP's case, he's the technical co-founder without sufficient technical skills to launch a company. I think this is actually under-reported in start-up failures and missed as a root cause in debacles like the ObamaCare web-site. So you have to ask whether the company would still exist without the CTO and whether this co-founder was/is a liability.
In your case, you were clearly the technical guy and capable of producing the required product, but you were worse at picking your co-founders.
I'm not disagreeing with the idea of legal representation, but I think your best paragraphs are buried near the end. He should let the CTO take over the technical domain and move onto another area where he can help ... or he should leave.
In the OP's case, he's the technical co-founder without sufficient technical skills to launch a company. I think this is actually under-reported in start-up failures and missed as a root cause in debacles like the ObamaCare web-site. So you have to ask whether the company would still exist without the CTO and whether this co-founder was/is a liability.
In your case, you were clearly the technical guy and capable of producing the required product, but you were worse at picking your co-founders.
I'm not disagreeing with the idea of legal representation, but I think your best paragraphs are buried near the end. He should let the CTO take over the technical domain and move onto another area where he can help ... or he should leave.
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It's interesting that when it involves a founder we're suddenly no longer considering the obvious scenario that the author is one of the many coders who is simply not good enough and has to go. And the author himself has already admitted his limited competence.
It's perfectly reasonably for the CTO to ask him to leave as a coder. In fact, setting those standards and making those decisions is what you hire a CTO for.
Unless he's been asked to surrender his equity and/or not take up any other non-technical position, everything else about being "squeezed out" is strictly speculative.
This may strictly be a matter of competence.
(Doesn't mean the author shouldn't be taking precautions, those any founder should take from the moment they involve external funding. From whatever angle or for whatever reason, the issue of ditching one of the founders will come up.)
It's perfectly reasonably for the CTO to ask him to leave as a coder. In fact, setting those standards and making those decisions is what you hire a CTO for.
Unless he's been asked to surrender his equity and/or not take up any other non-technical position, everything else about being "squeezed out" is strictly speculative.
This may strictly be a matter of competence.
(Doesn't mean the author shouldn't be taking precautions, those any founder should take from the moment they involve external funding. From whatever angle or for whatever reason, the issue of ditching one of the founders will come up.)
I would really not assume competence on the part of the other people in this arrangement. Once this guy goes, the CEO is locked into an expensive team, and will need to find equity and cash to motivate them. They can dilute this guy's share to start, but why stop there? And how well are future funding rounds going to go when the investors realize this?
No sane startup would ever get rid of a technical cofounder who knows the stack and can be motivated by his ownership stake to keep the servers running in a worst case scenario. So it really sounds like the CEO is incompetent and doesn't realize he needs to preserve his ability to remain independent in order to have leverage with investors.
No sane startup would ever get rid of a technical cofounder who knows the stack and can be motivated by his ownership stake to keep the servers running in a worst case scenario. So it really sounds like the CEO is incompetent and doesn't realize he needs to preserve his ability to remain independent in order to have leverage with investors.
>>It's interesting that when it involves a founder we're suddenly no longer considering the obvious scenario that the author is one of the many coders who is simply not good enough and has to go.
Sure, Pay up the fair compensation. Then he can have a clean exit.
Sure, Pay up the fair compensation. Then he can have a clean exit.
> There are two possibilities right off the bat: (i) the CEO is involved, which is likely given the difficulty involved in squeezing-out a shareholder + 50% co-founder; (ii) the CTO is working alone, hoping to push you out the door and benefit in some way from the resulting vacuum.
Well aren't you mister negative here. If this guy was just an employee the tone of this thread would be very different. Every CTO knows there's coders that can just drag down the efficiency of the team. Every programmer knows in his bones that some programmers are poisonous to your codebase, even if they get shit done.
So how about a third option: They are just trying to cut out dead weight from the company.
So yes, get an attorney, yes, make sure you get what you deserve. But don't assume your friend (your cofounder is your friend right?) is backstabbing you before you are absolutely certain, no use in getting bitter before the hurt is done. A startup is a business, and businesses need to run efficient to succeed.
Asking you to leave, and asking it to be in three to six months, that's quite different than doing it suddenly when your grandmother dies. To me it sounds like they're doing it as classy as they can.
I'd say, if you really want to keep working with them, step up your game, make sure you're the programmer they need.
In any case, lawyer up, you have risked a lot going into a startup, so you most definitely have rights to that slice of the money pie when it comes.
Well aren't you mister negative here. If this guy was just an employee the tone of this thread would be very different. Every CTO knows there's coders that can just drag down the efficiency of the team. Every programmer knows in his bones that some programmers are poisonous to your codebase, even if they get shit done.
So how about a third option: They are just trying to cut out dead weight from the company.
So yes, get an attorney, yes, make sure you get what you deserve. But don't assume your friend (your cofounder is your friend right?) is backstabbing you before you are absolutely certain, no use in getting bitter before the hurt is done. A startup is a business, and businesses need to run efficient to succeed.
Asking you to leave, and asking it to be in three to six months, that's quite different than doing it suddenly when your grandmother dies. To me it sounds like they're doing it as classy as they can.
I'd say, if you really want to keep working with them, step up your game, make sure you're the programmer they need.
In any case, lawyer up, you have risked a lot going into a startup, so you most definitely have rights to that slice of the money pie when it comes.
It always pays to take the worst case scenarios seriously. If you refuse to even consider them, when and if they turn out to be true, you find yourself utterly unprepared.
As to dead wood, as a cofounder and director this is his call too. Leaving the business may well be best for the business, and therefore best for him - so long as equity etc. is retained, although that's a dangerous position if you do not have or have only minority voting rights.
I am a 30 in a 30/30/40 company. I am terminally paranoid I'm due for the squeeze, so I plan for it and work against its possibility, as in my experience even your closest and best will apologetically drive in the knife, if the price is right. Pays to wear armour, in the format of contract law.
As to dead wood, as a cofounder and director this is his call too. Leaving the business may well be best for the business, and therefore best for him - so long as equity etc. is retained, although that's a dangerous position if you do not have or have only minority voting rights.
I am a 30 in a 30/30/40 company. I am terminally paranoid I'm due for the squeeze, so I plan for it and work against its possibility, as in my experience even your closest and best will apologetically drive in the knife, if the price is right. Pays to wear armour, in the format of contract law.
Words of wisdom.
> So how about a third option: They are just trying to cut out dead weight from the company.
"They?" -> is the non-founder _employee_, with much less stake in company's future than the said founder.
"Dead weight?" -> is the founder who put his life savings in the venture, and is obviously desirable till the next round of funding.
A more reasonable "don't-conflict-ignorance-with-malice" would be that CTO has technical acumen but not business, and is judging the OP harshly on the technical merit.
"They?" -> is the non-founder _employee_, with much less stake in company's future than the said founder.
"Dead weight?" -> is the founder who put his life savings in the venture, and is obviously desirable till the next round of funding.
A more reasonable "don't-conflict-ignorance-with-malice" would be that CTO has technical acumen but not business, and is judging the OP harshly on the technical merit.
That last paragraph is gold, OP. Use it to negotiate a clean exit where you are fairly compensated for your contributions.
The whole post is pure gold.
OP. Just follow it letter-by letter. Make a check-list out of it, if you like. And you probably will be Ok (doesn't necessarily mean that you'll get anything out of it, but it would greatly increase the probability of at least negotiating a clean exit. or at the very least you will know that you've done a good rational move, at least this time around). Do not skip the attorney step. Do not skip the attorney step. (I'm not an attorney myself. I'm just a software developer. And I'm telling you. Do not skip the attorney step).
OP. Just follow it letter-by letter. Make a check-list out of it, if you like. And you probably will be Ok (doesn't necessarily mean that you'll get anything out of it, but it would greatly increase the probability of at least negotiating a clean exit. or at the very least you will know that you've done a good rational move, at least this time around). Do not skip the attorney step. Do not skip the attorney step. (I'm not an attorney myself. I'm just a software developer. And I'm telling you. Do not skip the attorney step).
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I will get a lawyer, not the company one. Thank you for all of your advice.
Good job. I for one would be _very_ interested in a follow up post on how this turns out. Good luck.
>Painful though it may be, you never ever litigate on principle. Not if you have any brains at all.
It's not worthwhile to litigate on principle, but it may be worthwhile to be the kind of person who litigates on principle. It really depends on how often you expect a reputation for being litigious to help you out.
It's not worthwhile to litigate on principle, but it may be worthwhile to be the kind of person who litigates on principle. It really depends on how often you expect a reputation for being litigious to help you out.
Only thing I see you have to be sure what kind of people you are striking partnership with. Checking references however casually is paramount to binding yourself for the long haul.
So if you get a whiff of partner's mischievous behaviour in past business dealings, it might be better striking out on your own or looking for other options.
As in being squeezed out get your partnership drawn up right after starting out on the project, whether you horizon for getting investments/public launch is 6 months or 2 years. After all you don't want to waste your time. If you don't have iron clad paper work covering you, most likely you have been played. If you are prepared for this then you would not have questions.
If the venture is out to grow big, talk to a lawyer and get the injunction against them so they can't proceed until they sort out your stake in the company, how much they owe and al the other business relates stuff. Also check if you have rights to the property you just might launch your own competitor product if there is nothing that explicitly forbids you from doing so. Savlage what you can, I am sure you can come out on top if you play your cards right and have honor in you intentions.
So if you get a whiff of partner's mischievous behaviour in past business dealings, it might be better striking out on your own or looking for other options.
As in being squeezed out get your partnership drawn up right after starting out on the project, whether you horizon for getting investments/public launch is 6 months or 2 years. After all you don't want to waste your time. If you don't have iron clad paper work covering you, most likely you have been played. If you are prepared for this then you would not have questions.
If the venture is out to grow big, talk to a lawyer and get the injunction against them so they can't proceed until they sort out your stake in the company, how much they owe and al the other business relates stuff. Also check if you have rights to the property you just might launch your own competitor product if there is nothing that explicitly forbids you from doing so. Savlage what you can, I am sure you can come out on top if you play your cards right and have honor in you intentions.
Please get a legal counsel and fire the CTO.
At this early stage trust and respect is the only glue and he seems to have none for you at least.
First and foremost, involving attorneys costs everyone a lot of time and money. Unless you want exactly that (maybe out of a desire to "punish" them), it's better to just leave.
Any competent attorney will tell you that you should never litigate on principle (such as "punishing" them). If that's your only reason, many attorneys will choose not to take you on as a client right then and there. All the court can do is use money to attempt to redress your grievances, assuming you win.
But that's not why you need an attorney right now. Even if you're never going to file suit, an attorney will help you navigate the waters and push for the best possible outcome in your situation. Maybe that's compensation for a clean exit, or simply putting an outright stop to the CTO's machinations. I don't know.
Yes, they cost money. But this is already a legal matter. It became one the moment the CTO started to try and squeeze the OP out. Spending the money on an attorney now is simply an attempt to avoid losing more money later on down the road.
Not talking to an attorney at this point is nothing short of willful ignorance. It won't stop the squeeze-out, nor will being able to say "I didn't bring in the lawyers!" somehow make things all better when you're out the door, up the creek, and without the stupid fucking paddle.
But that's not why you need an attorney right now. Even if you're never going to file suit, an attorney will help you navigate the waters and push for the best possible outcome in your situation. Maybe that's compensation for a clean exit, or simply putting an outright stop to the CTO's machinations. I don't know.
Yes, they cost money. But this is already a legal matter. It became one the moment the CTO started to try and squeeze the OP out. Spending the money on an attorney now is simply an attempt to avoid losing more money later on down the road.
Not talking to an attorney at this point is nothing short of willful ignorance. It won't stop the squeeze-out, nor will being able to say "I didn't bring in the lawyers!" somehow make things all better when you're out the door, up the creek, and without the stupid fucking paddle.
You are suggesting that the lawyer can help in two ways:
1. Negotiations
2. Understanding the legal situation
Regarding the second point, the correct advice is not to sign contracts whose consequences you do not understand. Regarding the first point, engaging a lawyer will destroy whatever trust and mutual understanding is left in the relationship between the founders.
This might be the US way of doing things. But before telling someone to hire a lawyer, you should make sure that the case in question is not taking place in a country where doing this is generally taken as a big offense.
1. Negotiations
2. Understanding the legal situation
Regarding the second point, the correct advice is not to sign contracts whose consequences you do not understand. Regarding the first point, engaging a lawyer will destroy whatever trust and mutual understanding is left in the relationship between the founders.
This might be the US way of doing things. But before telling someone to hire a lawyer, you should make sure that the case in question is not taking place in a country where doing this is generally taken as a big offense.
Regarding the second point, the correct advice is not to sign contracts whose consequences you do not understand.
Ideally, yes, but it sounds like that ship sailed already.
Regarding the first point, engaging a lawyer will destroy whatever trust and mutual understanding is left in the relationship between the founders.
You don't have to tell them you hired a lawyer at first, when you're just looking for some basic advice about what your situation really is.
If it goes further and your lawyer is actively representing you when dealing with other people in a business context, and those other people take offence at this or it destroys trust, then you never really had a worthwhile relationship with them to begin with and you definitely want a lawyer in your corner.
Ideally, yes, but it sounds like that ship sailed already.
Regarding the first point, engaging a lawyer will destroy whatever trust and mutual understanding is left in the relationship between the founders.
You don't have to tell them you hired a lawyer at first, when you're just looking for some basic advice about what your situation really is.
If it goes further and your lawyer is actively representing you when dealing with other people in a business context, and those other people take offence at this or it destroys trust, then you never really had a worthwhile relationship with them to begin with and you definitely want a lawyer in your corner.
A non-lawyer is going to have a very hard time ensuring they understand the consequences of a contract if it's cleverly written to fuck them.
Normally, when founding a company, there is trust among the founders and they do not try to fuck each other with maliciously written contracts.
Trust is often misplaced, and there are plenty of people who seem nice initially while working to screw you.
When you write a contract designed to screw the other party, you run the risk of being discovered.
And when you're screwing someone who holds to the "no lawyers because you're supposed to trust your cofounders" approach that risk is generally greatly diminished.
That's true. Which is why you should trust...but verify.
Offending the people trying to screw you out of your earned rights and compensation should not be at the top of your list of things to avoid.
One of the few paths to success is patching things up with the CEO if that's feasible and desirable.
We don't know whether they want to screw him. All we know is that the hired CTO thinks that he is incompetent and thus should leave the company. The first thing he should do in this situation is to talk to the CEO, and not running to a lawyer or consulting hacker news.
> But before telling someone to hire a lawyer, you should make sure that the case in question is not taking place in a country where doing this is generally taken as a big offense.
Interesting. Can you give an example of such a place, and how things tend to work there? What would be your advice to the founder if they were in that country?
Interesting. Can you give an example of such a place, and how things tend to work there? What would be your advice to the founder if they were in that country?
Continental European countries usually work that way. When Germans say "die sprechen nur noch über ihre Anwälte" (translation: they used to have a good relationship but now they only speak through their lawyers to each other), it means that the trust between two parties is broken beyond repair. Generally, by unilaterally involving a lawyer, you signal that there is no hope left to settle disputes on a basis of trust and friendship. Consequently, my advise to the founder would be to discuss the situation with the co-founders and then try to do what's best for the company. The first priority should always be to find a solution by talking directly to each other. Telling the founder to hire a lawyer before having had an open discussion with the CEO is really bad advice.
Eh, no, also in Germany it's perfectly normal to have a lawyer consulting on business matters with potential big impacts.
Not to the same degree. The US spends a much higher share of GDP on lawyers than most other countries.
What I find disgusting is the culture of hiring a lawyer to put as many traps as possible into a contract, which forces the other party to hire another lawyer to remove the traps again. This does not make anyone better off except for the lawyers.
Healthy and lasting business relationships are built on trust. The relationship between McDonald's and Coca-Cola is based on a simple hand-shake. If you want to preserve such a relationship and it comes to a disagreement, the first thing you should do is talking to each other. Once that fails, you can consult the lawyer - which will formalize everything and slow the process down (e.g. "I cannot disuss this today because I have to check with my lawyer first"). And being slow is one of the things one should avoid when being in a startup.
What I find disgusting is the culture of hiring a lawyer to put as many traps as possible into a contract, which forces the other party to hire another lawyer to remove the traps again. This does not make anyone better off except for the lawyers.
Healthy and lasting business relationships are built on trust. The relationship between McDonald's and Coca-Cola is based on a simple hand-shake. If you want to preserve such a relationship and it comes to a disagreement, the first thing you should do is talking to each other. Once that fails, you can consult the lawyer - which will formalize everything and slow the process down (e.g. "I cannot disuss this today because I have to check with my lawyer first"). And being slow is one of the things one should avoid when being in a startup.
"The relationship between McDonald's and Coca-Cola is based on a simple hand-shake."
...
Look there is no reasonable discourse possible with idiocy like this. If you think a sustainable business is possible without covering your legal grounds, I'm wondering if you'd be interested in this bridge in Brooklyn I have for sale. Blanket statements like 'the US spends a much higher share of its GDP on lawyers' don't mean a thing without a proper understanding of the legal system, business culture etc. It is obvious from your postings in this thread you know nothing about what lawyers actually do for a business, in the US nor in Germany, and that your statements are based on what you see on TV and blind prejudices.
(disclaimers: I have a law degree but have never practiced. I'm not an American, yet I have spend amounts on lawyers the last years that you probably feel are obscene, and this in a country that is considered similar to Germany in its look on lawyers, and they were worth every penny, and then some. I have also paid dearly in the past for not doing things the formal legal way, including in Germany.)
...
Look there is no reasonable discourse possible with idiocy like this. If you think a sustainable business is possible without covering your legal grounds, I'm wondering if you'd be interested in this bridge in Brooklyn I have for sale. Blanket statements like 'the US spends a much higher share of its GDP on lawyers' don't mean a thing without a proper understanding of the legal system, business culture etc. It is obvious from your postings in this thread you know nothing about what lawyers actually do for a business, in the US nor in Germany, and that your statements are based on what you see on TV and blind prejudices.
(disclaimers: I have a law degree but have never practiced. I'm not an American, yet I have spend amounts on lawyers the last years that you probably feel are obscene, and this in a country that is considered similar to Germany in its look on lawyers, and they were worth every penny, and then some. I have also paid dearly in the past for not doing things the formal legal way, including in Germany.)
Spoken like someone who's never been involved in a sticky legal situation.
The money you save hiring a good lawyer almost always justifies the money spent, especially in a situation where you have forces mounted against you.
Not only can they help you with "do this, don't do that" advice, they are very strategic in positioning and can offer incredible advice based on years of experience.
Good lawyers generally see situations on both sides of the coin because they have clients on both sides of the coin, and hiring one can give you volumes of insight and perspective. Will it cost you $5K? Yes, but that $5K now might get you $8M two years from now...
The money you save hiring a good lawyer almost always justifies the money spent, especially in a situation where you have forces mounted against you.
Not only can they help you with "do this, don't do that" advice, they are very strategic in positioning and can offer incredible advice based on years of experience.
Good lawyers generally see situations on both sides of the coin because they have clients on both sides of the coin, and hiring one can give you volumes of insight and perspective. Will it cost you $5K? Yes, but that $5K now might get you $8M two years from now...
This is your company. Not the CTO's.
It's time to have a frank discussion with your co-founder and decide what is best for you and for the company.
It may ultimately be best for you to step down, but it shouldn't ever be because of your technical abilities, and it shouldn't be because the CTO believes you should.
There are lots of things you can be doing, and the fact that you CAN code (even if it's not high level) is huge.
There is testing, blogging, social networking posts, Google Analytics, SEO/SEM, recruiting, buying office supplies, soda runs, customer outreach, marketing, more testing, design, investor outreach, product management, program management.
You have so much that you can do, that unless you are a liability (past convictions by the SEC), or so caustic that you are the direct cause for the companies failures, that you still have an important role at your company for many years to come.
And if you do stay, it's time to put the CTO on notice, the CTO works for you.
It's time to have a frank discussion with your co-founder and decide what is best for you and for the company.
It may ultimately be best for you to step down, but it shouldn't ever be because of your technical abilities, and it shouldn't be because the CTO believes you should.
There are lots of things you can be doing, and the fact that you CAN code (even if it's not high level) is huge.
There is testing, blogging, social networking posts, Google Analytics, SEO/SEM, recruiting, buying office supplies, soda runs, customer outreach, marketing, more testing, design, investor outreach, product management, program management.
You have so much that you can do, that unless you are a liability (past convictions by the SEC), or so caustic that you are the direct cause for the companies failures, that you still have an important role at your company for many years to come.
And if you do stay, it's time to put the CTO on notice, the CTO works for you.
I really don't understand this story, most tech entrepreneurs with successful companies have to hire people better than them, mark zuckerberg, jack dorsey(especially the twitter guys), snapchat etc. You 2 guys are the founders and hired a CTO and the CTO is telling you to leave, imagine the CTO of snapchat telling Evan Spiegal who cannot code to leave, it just doesn't add up.
If i had to guess, your cofounder who is the business guy realizes that the CTO is a better coder than you and is trying to push you out and offer the CTO a better share of the company. You really need to stand up for yourself, do not limit yourself or feel inferior, i mean even Larry and Sergey had to get better programmers than them.
If i had to guess, your cofounder who is the business guy realizes that the CTO is a better coder than you and is trying to push you out and offer the CTO a better share of the company. You really need to stand up for yourself, do not limit yourself or feel inferior, i mean even Larry and Sergey had to get better programmers than them.
"EDIT: He's not asking me to leave now, since I'm still desperately needed, but in 3-6 months time after we have raised more funding."
Means they do actually need you, the CTO is waiting for a payday before kicking you out for a higher stake. Tell the CTO to go stick it if they need you before funding but not after.
Means they do actually need you, the CTO is waiting for a payday before kicking you out for a higher stake. Tell the CTO to go stick it if they need you before funding but not after.
I had something like this happen to me (on a larger scale) - I folded, and regretted it for years.
Firstly - go straight to see a lawyer. Do not consider anything else before you have done this. Play hard, don't blink!
Secondly. If things don't go your way, play the long game and take your time. Make sure that they know that this will not be resolved quickly, and that having this hanging over them will frustrate their attempts to raise capital.
Behind the scenes this is what I think is going on:
1) The CTO is more experienced, and thinks he is entitled to more than you as a result (you seem to agree that you are relatively inexperienced). He cares little about loyalty and honour as he was not there to see you slogging it out in the early days.
2) What you have set up must be worthwhile and be starting to get valuable, otherwise you would not have attracted a "good" CTO.
3) My thoughts are this is part of the play to attract equity:
- They probably don't want to dilute too much, so would love to grab your shares back before the deal so that they can neaten things out for the new investor
- They probably want the new deal to include shares for the CTO. He is probably niggling for this, and the CEO would prefer to take yours than dilute his.
- They want to put forward a team that has the most value for fund raising. They want solid credentials, and probably feel that yours don't fit the bill.
Good luck hey!
Firstly - go straight to see a lawyer. Do not consider anything else before you have done this. Play hard, don't blink!
Secondly. If things don't go your way, play the long game and take your time. Make sure that they know that this will not be resolved quickly, and that having this hanging over them will frustrate their attempts to raise capital.
Behind the scenes this is what I think is going on:
1) The CTO is more experienced, and thinks he is entitled to more than you as a result (you seem to agree that you are relatively inexperienced). He cares little about loyalty and honour as he was not there to see you slogging it out in the early days.
2) What you have set up must be worthwhile and be starting to get valuable, otherwise you would not have attracted a "good" CTO.
3) My thoughts are this is part of the play to attract equity:
- They probably don't want to dilute too much, so would love to grab your shares back before the deal so that they can neaten things out for the new investor
- They probably want the new deal to include shares for the CTO. He is probably niggling for this, and the CEO would prefer to take yours than dilute his.
- They want to put forward a team that has the most value for fund raising. They want solid credentials, and probably feel that yours don't fit the bill.
Good luck hey!
What happened to you?
I co-founded a company that grew to around $200Mil valuation in three years (not big by your guys terms, but exciting for all involved). We realised our own limitations, so we brought in the big guns to take it to the next level. One year on they got rid of four of the four founders and shafted us over vesting - taking about $18mil off each of us.
There are two sides to every story - we didn't adjust well to being bossed around. But at the end of the day, once they decided to get us out, they played to screw us over entirely. All I expected was to be treated fairly - how naive. For example, their lawyers pounced on me as I was leaving my moms funeral (still in the church grounds) - knowing that this was where I was. Eventually I just wanted out - I took a ridiculous offer of just getting my initial investment back because I was disgusted at them and wanted to move on. Next time I would dig in more!
Edit: ONce I left it took a while to get over, but my life has been amazing since then, so all good!
There are two sides to every story - we didn't adjust well to being bossed around. But at the end of the day, once they decided to get us out, they played to screw us over entirely. All I expected was to be treated fairly - how naive. For example, their lawyers pounced on me as I was leaving my moms funeral (still in the church grounds) - knowing that this was where I was. Eventually I just wanted out - I took a ridiculous offer of just getting my initial investment back because I was disgusted at them and wanted to move on. Next time I would dig in more!
Edit: ONce I left it took a while to get over, but my life has been amazing since then, so all good!
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This is your company, not the CTO's. It's time to fire him.
The ability to code really doesn't have much to do in the long run to the company success. Of the two founders at the company I work for, both could code but one hasn't in a long time and the other only does on occasion. As the team has grown, their responsibilities have shifted. Yours will too.
The ability to code really doesn't have much to do in the long run to the company success. Of the two founders at the company I work for, both could code but one hasn't in a long time and the other only does on occasion. As the team has grown, their responsibilities have shifted. Yours will too.
Fire him, or something. Unless you're some weird 1% founder and the CTO has a 10% stake, this is simply not his call to make. Even suggesting it is out of line.
Programmers get fucked all the time because they lack power in companies, even over things that aren't particularly their fault. You may fancy yourself as someone who is enlightened and listens to his employees. All well and good, but you are not obligated to participate in your own ousting.
You took a bunch of risk, did a ton of work, etc. This is the time to harvest that, not be obsessed with justice. He can start his own damn company if he's so smart.
Programmers get fucked all the time because they lack power in companies, even over things that aren't particularly their fault. You may fancy yourself as someone who is enlightened and listens to his employees. All well and good, but you are not obligated to participate in your own ousting.
You took a bunch of risk, did a ton of work, etc. This is the time to harvest that, not be obsessed with justice. He can start his own damn company if he's so smart.
Provided you're not writing anything that detrimentally impacts the product, there's no reason for you to leave. It's your company.
Now I say this not so you can sit back and let others do the hard work, but for you to figure out how else you can contribute. Every startup, hell every mature company, has issues to deal with on a daily basis. I would be very surprised if there wasn't something else you could be doing for the company.
Worst comes to worst, your job from here on out is to do the tasks nobody else wants to do. From a technical perspective that could mean things like sanitizing the database (if it needs it) or going back and writing some good tests for already-implemented code. From a business perspective, this could mean researching, scraping, generating leads to customers, users, etc. Hell, you can even be the glorified secretary by helping others manage their day-to-day tasks, schedules, appointments. Be the office janitor. Be the guy they send to campus events to talk to students.
If you can no longer contribute to the code for your product, that's OK. There's a million and one things you can do outside that realm to support the product as well as your teammates.
Of course you can always buckle down on your coding game and get better at it. Take online courses. If you (and your company) can afford the time and money, go to one of those schools that teach you to be a better programmer. Tell your CTO that you want to get better and want to learn from him/her.
Be the glue that holds everyone together. Be the swing man that can bounce from activity to activity and ensure everything is running smoothly. Be the founder who's relentlessly resourceful and continues to move the company forward in any shape or form.
Now I say this not so you can sit back and let others do the hard work, but for you to figure out how else you can contribute. Every startup, hell every mature company, has issues to deal with on a daily basis. I would be very surprised if there wasn't something else you could be doing for the company.
Worst comes to worst, your job from here on out is to do the tasks nobody else wants to do. From a technical perspective that could mean things like sanitizing the database (if it needs it) or going back and writing some good tests for already-implemented code. From a business perspective, this could mean researching, scraping, generating leads to customers, users, etc. Hell, you can even be the glorified secretary by helping others manage their day-to-day tasks, schedules, appointments. Be the office janitor. Be the guy they send to campus events to talk to students.
If you can no longer contribute to the code for your product, that's OK. There's a million and one things you can do outside that realm to support the product as well as your teammates.
Of course you can always buckle down on your coding game and get better at it. Take online courses. If you (and your company) can afford the time and money, go to one of those schools that teach you to be a better programmer. Tell your CTO that you want to get better and want to learn from him/her.
Be the glue that holds everyone together. Be the swing man that can bounce from activity to activity and ensure everything is running smoothly. Be the founder who's relentlessly resourceful and continues to move the company forward in any shape or form.
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This "enterprise grade" terminology is suspicious. Did this CTO come up with that as a way to sell his value?
Too often in our industry the word "enterprise" is a smokescreen. Did he bring some real value to the table in terms of what the customer is seeing, or just some basic good development practices sprinkled with magic "enterprise" fairy dust?
Regardless, I have to agree with the other commenters. This guy is not your friend, he is not being straight with you, and he is not looking out for your interests. He could be a massive sociopath asshole, or maybe just an aggressive alpha nerd who doesn't know how to deal with personal problems.
Make sure you're protected. Your equity and your relationship with your cofounder are the two most important things to get covered against this guy, in that order.
Too often in our industry the word "enterprise" is a smokescreen. Did he bring some real value to the table in terms of what the customer is seeing, or just some basic good development practices sprinkled with magic "enterprise" fairy dust?
Regardless, I have to agree with the other commenters. This guy is not your friend, he is not being straight with you, and he is not looking out for your interests. He could be a massive sociopath asshole, or maybe just an aggressive alpha nerd who doesn't know how to deal with personal problems.
Make sure you're protected. Your equity and your relationship with your cofounder are the two most important things to get covered against this guy, in that order.
there's a fundamental problem here if the "CTO" can talk down to an owner like that. Obviously YOU didn't hire the CTO, because he doesn't see YOU as his boss. There's already another conversation with this guy that you weren't part of. for sanity sake, get a lawyer to claw back what you can, and cut anchor at the next funding round. If you're straight forward that you want out then that might even make the new funders feel better. Just be sure to drop hints that this CTO needs to be cut out of ownership....
If you are a founder:
- Are you needed?
Reading your post sounds like you don't have self confidence, but you got to find your edge! It doesn't have to be coding. There's more to a startup than lines of code, and if you were there since Day 1, you've already done much more for the company than the CTO. Feel better about yourself, and take a pivot on your perspectives.
- Are you needed?
- yes: then stay.
- no: Do founders hate me?
- yes: get the legal stuff ready, leave with compensation.
- no: Do you have future plans for contribution?
- yes: then get to work!
- no: Do you like your job?
- yes: then get back to work, make contributions.
- no: then why are you asking this question?
Reading your post sounds like you don't have self confidence, but you got to find your edge! It doesn't have to be coding. There's more to a startup than lines of code, and if you were there since Day 1, you've already done much more for the company than the CTO. Feel better about yourself, and take a pivot on your perspectives.
Uh, you are a founder. Nobody asks you to leave. You took part of the risk to start the company, the new CTO did not. He does not get to tell you to leave. Ever. Period. I'm actually shocked that you're even considering it.
It is REALLY stupid to tell someone you want them to leave in 3 months. Why not wait until three months have gone by? My totally uninformed guess is there is some kind of long game / ego thing at play besides just actually ability to contribute. Don't feel ashamed that you aren't the alpha tech. If you are trying your hardest, and especially as a cofounder, you would be more than welcome at any company I have ever worked at.
And why would you tell someone this right before fundraising? What a great way to fuck up your round...tell a cofounder you don't want his ass around in 3 months.
Oh, by the way, can you come to this meeting and pretend you're happy here?
Oh, by the way, can you come to this meeting and pretend you're happy here?
> My question is, does he have a point?
No. He is making the wrong assumption here "that he wouldn't hire me if I wasn't already a founder and not what the company needs". First you ARE a founder- I genuinely do not believe you can't learn the knowledge you needed given how motivated you are. And you are learning. Second, he already admit you are what the company needs (at least during this 3-6 months), so why is he BS you to leave? He's mindset is so wrong for the startup world, just assuming things will take-off and by-then you are not needed anymore. You are desperately needed now; that makes you valuable. Your company probably can't make it to the next milestone in 3-6 months without you, at least it will take longer to hit milestones longer without you. You are valuable, and you feel for the company, just tell him that.
> Is this something that is common?
Yes, but not quite often at this early stage of a startup. I smell some politics of him. Do you two get along well besides tech issues in the company? Since he knows you are still desperately needed now, and he is still making BS about advising you to leave, I can only conclude he probably does not like you (not just in tech realms), and he clearly does not care about the success of the company as much as I do (the company still needs you to be successful at least at this stage of growth).
> Has he overstepped the boundaries?
First thing first, just learn things you need to know fast. You will know when you are making great contributions to the company, and you want that. Don't let your CTO stops you from that. At least when you are working, don't think about the issue with him and grow fast as a coder. I suggest a conversation with him off the work time. If I were you, I would like to know if he had issues with me beyond his doubt in my tech ability.
> It is in my interest however to remain in the company because my equity is vested, the sooner I leave the less I will get in return, apart from my time, and opportunity cost I invested all my personal wealth.
Did you have cliff in your equity vesting? If so have you past the cliff period? I really don't recommend you to leave before all your cliff equity are vested, otherwise you will get next to nothing. Manage to stay with your company at least in the cliff period. Your company wouldn't make this far without you, your company owes you that, and you know through what it should pay you off? Equity. So just manage to get the credit where credit is due.
---
May the best luck be with you.
No. He is making the wrong assumption here "that he wouldn't hire me if I wasn't already a founder and not what the company needs". First you ARE a founder- I genuinely do not believe you can't learn the knowledge you needed given how motivated you are. And you are learning. Second, he already admit you are what the company needs (at least during this 3-6 months), so why is he BS you to leave? He's mindset is so wrong for the startup world, just assuming things will take-off and by-then you are not needed anymore. You are desperately needed now; that makes you valuable. Your company probably can't make it to the next milestone in 3-6 months without you, at least it will take longer to hit milestones longer without you. You are valuable, and you feel for the company, just tell him that.
> Is this something that is common?
Yes, but not quite often at this early stage of a startup. I smell some politics of him. Do you two get along well besides tech issues in the company? Since he knows you are still desperately needed now, and he is still making BS about advising you to leave, I can only conclude he probably does not like you (not just in tech realms), and he clearly does not care about the success of the company as much as I do (the company still needs you to be successful at least at this stage of growth).
> Has he overstepped the boundaries?
First thing first, just learn things you need to know fast. You will know when you are making great contributions to the company, and you want that. Don't let your CTO stops you from that. At least when you are working, don't think about the issue with him and grow fast as a coder. I suggest a conversation with him off the work time. If I were you, I would like to know if he had issues with me beyond his doubt in my tech ability.
> It is in my interest however to remain in the company because my equity is vested, the sooner I leave the less I will get in return, apart from my time, and opportunity cost I invested all my personal wealth.
Did you have cliff in your equity vesting? If so have you past the cliff period? I really don't recommend you to leave before all your cliff equity are vested, otherwise you will get next to nothing. Manage to stay with your company at least in the cliff period. Your company wouldn't make this far without you, your company owes you that, and you know through what it should pay you off? Equity. So just manage to get the credit where credit is due.
---
May the best luck be with you.
I agree that it is a red flag that the CTO on one hand admits that the co-founder is valuable in the 3-6 months it takes to raise a round, and on the other hand asks him to leave after fundraising. At the very least this seems to indicate that the co-founder is essential for fundraising.
I want to stress that you as a co-founder should never let anyone talk you into staying with the company through fundraising and then leave. Telling an investor that a co-founder is leaving just after fundraising does not instill confidence, and planning to leave without telling prospective investors violates their trust. If you do this then you'll get a bad reputation with investors and it quite honestly makes you look like a bad person, so don't ever do that. If the cap-table needs to be redistributed and fixed up do the cleanup before the prospective in-laws come over (investors), as this kind of mess benefits no-one.
I want to stress that you as a co-founder should never let anyone talk you into staying with the company through fundraising and then leave. Telling an investor that a co-founder is leaving just after fundraising does not instill confidence, and planning to leave without telling prospective investors violates their trust. If you do this then you'll get a bad reputation with investors and it quite honestly makes you look like a bad person, so don't ever do that. If the cap-table needs to be redistributed and fixed up do the cleanup before the prospective in-laws come over (investors), as this kind of mess benefits no-one.
Is this not like you build a house, hire someone to live with you since they can build/extend this house even bigger, then they tell you to get out of your own house? I still don't understand how someone he hired can throw him out of his company?
He's worried that the company may grow and he'd then have rights to a big chunk of equity as the cofounder.
I'd establish that first. What kind of obligations has the company with him? just a salary/contract? part of the ownership?
So yeah, the vesting is key.
It simply doesn't resound logical to me that they are talking about firing him while at the same time he's needed for some months. Sounds ridiculous that they wouldn't have any role for him in that case, even if not as lead dev.
Reeks like backstabbing politics, so par for the course in the startup world.
I'd establish that first. What kind of obligations has the company with him? just a salary/contract? part of the ownership?
So yeah, the vesting is key.
It simply doesn't resound logical to me that they are talking about firing him while at the same time he's needed for some months. Sounds ridiculous that they wouldn't have any role for him in that case, even if not as lead dev.
Reeks like backstabbing politics, so par for the course in the startup world.
It's your company.. If your CTO is approaching you like that, send him packing with a pink slip. Do not pass go, do not collect $200.
There is a hell of lot more to building a company than just code and if he can talk to you any way he wants to without any consequences, then you have truly lost.
As others have said, you are supposed to hire people better than you, but that doesn't mean you have to take shit from them either.
Bottom line is don't be a doormat and be prepared to put "boot to ass" if necessary.
Good luck
There is a hell of lot more to building a company than just code and if he can talk to you any way he wants to without any consequences, then you have truly lost.
As others have said, you are supposed to hire people better than you, but that doesn't mean you have to take shit from them either.
Bottom line is don't be a doormat and be prepared to put "boot to ass" if necessary.
Good luck
I was once offered the job like this CTO, taking over from a less experienced co-founder, with his consent, while he remains in place. I didn't take the job for other reasons, but I would never have done what this guy is doing to you. And if I had, the CEO would probably fire me.
If you were really that bad, your co-founder CEO should have parted ways with you already. But of course you're not - just the fact that you are aware of your limitations and learning as you go, is evidence of that. I've seen bad technical co-founders, and they are NOT aware of their limitations usually, or don't care about it. And BTW for the quick-n-dirty prototype part of a start-up's life cycle, having crap code is perfectly fine IMHO - as long as you're aware of it and it's a conscious decision.
But if that really is the case (and I doubt it) - and it's for the greater good of the company that you will be fired - you should be very well compensated for your time and effort, as other have mentioned. I've actually seen another situation at a start-up where this was in fact the case, and the company was better off firing a co-founder. It was painful but he was compensated and got to keep most of his shares, so it was probably for his interest as well (though I'm not sure he realized it at the time).
If you were really that bad, your co-founder CEO should have parted ways with you already. But of course you're not - just the fact that you are aware of your limitations and learning as you go, is evidence of that. I've seen bad technical co-founders, and they are NOT aware of their limitations usually, or don't care about it. And BTW for the quick-n-dirty prototype part of a start-up's life cycle, having crap code is perfectly fine IMHO - as long as you're aware of it and it's a conscious decision.
But if that really is the case (and I doubt it) - and it's for the greater good of the company that you will be fired - you should be very well compensated for your time and effort, as other have mentioned. I've actually seen another situation at a start-up where this was in fact the case, and the company was better off firing a co-founder. It was painful but he was compensated and got to keep most of his shares, so it was probably for his interest as well (though I'm not sure he realized it at the time).
Let's assume that what the CTO says is true: you're not a good enough coder that you're any longer needed on a day-to-day basis in a few months. You're still a cofounder and I assume owner of quite a bit of equity of this company. Can't you talk to your other co-founder and find a different role for you on a day to day basis so that your stock still vests?
Or is this all about money/power? Is the new CTO threatened by you for some reason or trying to consolidate his power? Does the new CTO just not like you?
If you and your other co-founder are even remotely close, you guys need to talk. Sit down and figure out what other roles work for you at the company. Perhaps you will need to move out of management and become something like a "developer evangelist" or "head of support". Anything to keep vesting, right?
Or is this all about money/power? Is the new CTO threatened by you for some reason or trying to consolidate his power? Does the new CTO just not like you?
If you and your other co-founder are even remotely close, you guys need to talk. Sit down and figure out what other roles work for you at the company. Perhaps you will need to move out of management and become something like a "developer evangelist" or "head of support". Anything to keep vesting, right?
I say tell him to fuck off. No offense to him or you, but if your willing to keep learning code, then say no and don't look back.
The great thing about being human is our ability to learn. If your willing to learn, then there is nothing to argue about. You want to keep doing this and that is that. It took me 7 years to get where I am now, but I believe I am excellent at coding, where I didn't know anything 7 years ago. So if your willing, tell him to back the f off.
The great thing about being human is our ability to learn. If your willing to learn, then there is nothing to argue about. You want to keep doing this and that is that. It took me 7 years to get where I am now, but I believe I am excellent at coding, where I didn't know anything 7 years ago. So if your willing, tell him to back the f off.
He has overstepped his boundaries. The CTO works for the founders, he cannot really fire you (asking you to leave is just a polite war of phrasing it). Remind him that it is the duty of any smart manager to hire people who are smarter than him. That is what you did.
My guess is that your position with your cofounder is rather weak at the moment. The cofounder is probably stepping back and saying "This CTO guy knows what he is doing and if I have to choose, I would much rather go with him". That is a tough situation to be in. If that is true, it isn't your CTO firing you (he is just the front man), it is your cofounder. In fact, ONLY your cofounder can fire you (or your investors if you have sold them a big enough share).
My guess is that your position with your cofounder is rather weak at the moment. The cofounder is probably stepping back and saying "This CTO guy knows what he is doing and if I have to choose, I would much rather go with him". That is a tough situation to be in. If that is true, it isn't your CTO firing you (he is just the front man), it is your cofounder. In fact, ONLY your cofounder can fire you (or your investors if you have sold them a big enough share).
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You founded the company,doesnt matter how bad you are at coding there is more to running a company than coding skills.
I'd fire the CTO,no matter how good he is,you're the boss,he is merely an adviser,he shouldnt be talking to you like that. What matters in business is loyalty, not skills.You'll learn it soon enough.
I'd fire the CTO,no matter how good he is,you're the boss,he is merely an adviser,he shouldnt be talking to you like that. What matters in business is loyalty, not skills.You'll learn it soon enough.
What matters in business is loyalty, not skills.
And what matters even more than loyalty, in this kind of game?
Contracts.
If this is getting ugly, and the company has a product/service that could take off and be worth serious money, your only friend is your lawyer, and your primary assets should words with some signatures underneath.
And if, heaven forbid, we're talking about a cofounder who doesn't have a rock solid contract, the time to fix that is right now, with the help of that lawyer, while leaving immediately still appears to be a significant threat to the business.
And what matters even more than loyalty, in this kind of game?
Contracts.
If this is getting ugly, and the company has a product/service that could take off and be worth serious money, your only friend is your lawyer, and your primary assets should words with some signatures underneath.
And if, heaven forbid, we're talking about a cofounder who doesn't have a rock solid contract, the time to fix that is right now, with the help of that lawyer, while leaving immediately still appears to be a significant threat to the business.
Dead on.
>>What matters in business is loyalty, not skills.You'll learn it soon enough.
You got that one right.
You got that one right.
Loyalty? Really? You think that matters?
Another poster said exactly the right thing. Contracts, agreements, documentation, MOU, etc are the things that matter. Case in point: I am leaving company after being acquired. It's a mutual decision so both sides are happy, but we are negotiating an agreement right now to release me so I am free to pursue concepts (repeat: concepts not IP) that I pitched the CEO 2 years ago. They are only ideas but it still needs to be in writing since I don't want them coming back some years down the line. It's all about contracts.
Another poster said exactly the right thing. Contracts, agreements, documentation, MOU, etc are the things that matter. Case in point: I am leaving company after being acquired. It's a mutual decision so both sides are happy, but we are negotiating an agreement right now to release me so I am free to pursue concepts (repeat: concepts not IP) that I pitched the CEO 2 years ago. They are only ideas but it still needs to be in writing since I don't want them coming back some years down the line. It's all about contracts.
EDIT: He's not asking me to leave now, since I'm still desperately needed, but in 3-6 months time after we have raised more funding.
Then you are in a relatively strong bargaining position now, but it will probably get dramatically weaker very soon if you do not act.
I agree with those who said you need to take proper legal advice about how secure whatever stake you have in the company really is if they try to take it from you. For example, it is surprising that you mentioned any problems with vesting; as a co-founder, do you not have a certain share of the equity outright? Remember that you are wearing at least two hats here, one as co-founder/investor/equity holder and the other as original chief geek, and hopefully these are completely separate.
In any case, if they need you to get to the big time, then you are in a good position to negotiate mutually acceptable terms for your future and should take immediate steps to do so. It sounds like the best outcome might be a (hopefully amicable) separation, if the professional relationship doesn't look like it has a future, but in that case you're well within your rights to expect fair compensation for anything you're giving up.
But before you do anything else, talk to a lawyer who specialises in this kind of subject, discuss the details of your exact situation, and take advice accordingly.
Then you are in a relatively strong bargaining position now, but it will probably get dramatically weaker very soon if you do not act.
I agree with those who said you need to take proper legal advice about how secure whatever stake you have in the company really is if they try to take it from you. For example, it is surprising that you mentioned any problems with vesting; as a co-founder, do you not have a certain share of the equity outright? Remember that you are wearing at least two hats here, one as co-founder/investor/equity holder and the other as original chief geek, and hopefully these are completely separate.
In any case, if they need you to get to the big time, then you are in a good position to negotiate mutually acceptable terms for your future and should take immediate steps to do so. It sounds like the best outcome might be a (hopefully amicable) separation, if the professional relationship doesn't look like it has a future, but in that case you're well within your rights to expect fair compensation for anything you're giving up.
But before you do anything else, talk to a lawyer who specialises in this kind of subject, discuss the details of your exact situation, and take advice accordingly.
Tell him if he'd like a different boss he should work for a different company. It's your company, he's your employee, and he shouldn't have taken the job if he didn't want to work with and for you, and he's not the right person for the job if he can't.
Wow, that's tough. I have heard that when a biz scales, sometimes the early employees don't fit as well, because the skills needed are different than when first starting out. To get things going you do a lot of everything, and later they need specialists. How passionate are you about this startup? What does your co-founder think? You would think there could be some role you could fit into, maybe COO? Depending on its success I would hold your ground , or they should be willing to buy you out or something. Best wishes!
I'd immediately fire the guy. He works for you not the other way around. You are the co-founder, the big kahuna - not some engineer they hired along the way. Fire his pompous ass.
You'd make a better CTO than him. I'd rather work for a CTO who listens to good advice than one who is really sharp, but fucks people over.
Obviously, you are fairly technically competent (or he wouldn't need you around, and you wouldn't have gotten the prototype working). You're also a competent leader - you are listening to technical advice.
But let's say you hire a few more good coders. The CTO feels threatened. Is he going to listen to them when they challenge him, and possibly even step aside if one of them would be a better CTO, or is he going to fuck them over the same way he's fucking you over?
He sounds like a toxic political player. You can think "He's a snake, but he's our snake. His political skills will give us an edge", but it rarely works that way.
If you can, get rid of him, promote yourself to COO, and make the other good programmer CTO or lead programmer or something.
Obviously, you are fairly technically competent (or he wouldn't need you around, and you wouldn't have gotten the prototype working). You're also a competent leader - you are listening to technical advice.
But let's say you hire a few more good coders. The CTO feels threatened. Is he going to listen to them when they challenge him, and possibly even step aside if one of them would be a better CTO, or is he going to fuck them over the same way he's fucking you over?
He sounds like a toxic political player. You can think "He's a snake, but he's our snake. His political skills will give us an edge", but it rarely works that way.
If you can, get rid of him, promote yourself to COO, and make the other good programmer CTO or lead programmer or something.
The CTO can ask you to improve your coding or to stop coding, afterall he was retained to make those calls. But he cannot ask you to leave the company if you are a proper cofounder. The only person who is in any position to make a request like that is your cofounder or your Board.
I've been where you are right now. (But so has Eduardo Saverin, for whatever that's worth, and I'm no Eduardo Saverin. More accurately, the company I co-founded was no Facebook.) I launched something with two good friends in May 2010, got ousted in November 2011, and have watched the damn thing flourish, predictably, ever since... Here's what I think I learned from that experience:
First, you're asking the wrong question. Whether CTO Boy has "a point," and/or is within "boundaries" (whatever that means) is just self-inflicted misdirection. Reflect on these questions later. For now, the important thing is to make sure that you aren't haunted by doubts over whether you were fairly treated, so that your ability to learn and grow from this experience isn't hopelessly tainted by acrimony and distrust.
Second, recognize that once you've lost the confidence of your co-founder(s), for whatever reason(s), it's best to let them go. It's a free world, or at least it ought to be, and nobody should have to work with anybody they don't want to. That being said, your stake as a founder is worth something, and if the others want to take the operation over for themselves, they need to buy you out at a fair price. Regardless of whether you're a 23-year-old n00b or if you're Marc Andreesen (-- say, wasn't he 23 when... never mind --) what you need to be doing right now is tapping every available resource -- every mentor, teacher, counselor, former manager, and experienced friend -- for an outside perspective. Hate to say it, but HN doesn't count. We don't know enough about your business to really understand your situation or know how to respond to it.
Third, don't undermine your short-term position with free concessions. If they intend to cut you loose, but nonetheless can't survive without your help for the next 3-6 more months, that sounds like value that you're uniquely qualified to supply, and if they want you to forego the long-term returns on that investment, they need to compensate you for that in the short term. So, DO consult with an attorney and/or a seasoned entrepeneur to make sure you're not getting screwed.
All that being said, if you can manage to let your co-founders go their own way while being neither a dick nor a pushover, the community will respect you for it further on up the road.
Good luck.
First, you're asking the wrong question. Whether CTO Boy has "a point," and/or is within "boundaries" (whatever that means) is just self-inflicted misdirection. Reflect on these questions later. For now, the important thing is to make sure that you aren't haunted by doubts over whether you were fairly treated, so that your ability to learn and grow from this experience isn't hopelessly tainted by acrimony and distrust.
Second, recognize that once you've lost the confidence of your co-founder(s), for whatever reason(s), it's best to let them go. It's a free world, or at least it ought to be, and nobody should have to work with anybody they don't want to. That being said, your stake as a founder is worth something, and if the others want to take the operation over for themselves, they need to buy you out at a fair price. Regardless of whether you're a 23-year-old n00b or if you're Marc Andreesen (-- say, wasn't he 23 when... never mind --) what you need to be doing right now is tapping every available resource -- every mentor, teacher, counselor, former manager, and experienced friend -- for an outside perspective. Hate to say it, but HN doesn't count. We don't know enough about your business to really understand your situation or know how to respond to it.
Third, don't undermine your short-term position with free concessions. If they intend to cut you loose, but nonetheless can't survive without your help for the next 3-6 more months, that sounds like value that you're uniquely qualified to supply, and if they want you to forego the long-term returns on that investment, they need to compensate you for that in the short term. So, DO consult with an attorney and/or a seasoned entrepeneur to make sure you're not getting screwed.
All that being said, if you can manage to let your co-founders go their own way while being neither a dick nor a pushover, the community will respect you for it further on up the road.
Good luck.
The CTO has surely overstepped the boundaries.. the project/company is your baby and no one and i mean NO ONE should tell you to leave your baby.. the CTO is just like a 'hired' babysitter for your baby (you want to ensure that your baby is growing in a good and right direction) and you might lack some parenting skills but that doesnt mean you have to give up your baby in the hands of the babysitter.
Even though you may not be a great coder you can and will grow to be one great coder.
CTO should know this clearly that this company is yours and he is just an hired help.. he may be the best CTO out there in the world.. but he cannot even suggest you to leave the company..
Even though you may not be a great coder you can and will grow to be one great coder.
CTO should know this clearly that this company is yours and he is just an hired help.. he may be the best CTO out there in the world.. but he cannot even suggest you to leave the company..
A good CTO would help you improving. I know it's stupid to make assumptions, but I'd assume he's trying to manipulate himself into higher equity in an early stage. Telling someone that he's about to be let go is poison motivation-wise. He may be trying to reduce your performance so he can use your declined output against you.
I have no idea why people are actually recommending moving on.
You not only own part of the company but can use this experience to grow both technically and professionally.
Don't waste the chance to learn more than you ever could.
Are you taking a salary?
I don't see how you could contribute negatively to the company if you are at least somewhat productive and know the domain.
You not only own part of the company but can use this experience to grow both technically and professionally.
Don't waste the chance to learn more than you ever could.
Are you taking a salary?
I don't see how you could contribute negatively to the company if you are at least somewhat productive and know the domain.
If there's a reason to leave, it's that the situation might be too far gone to salvage. From the one side we can see here it seems unlikely that the CTO has kept this conversation/complaint limited to the OP, and his desire to remove one of the founders is already undermining that founder's leadership position in the company.
Getting out with compensation for the equity or accelerated vesting might be the best case scenario, depending on how far this has gone.
Getting out with compensation for the equity or accelerated vesting might be the best case scenario, depending on how far this has gone.
That's tough. Your last edit gives me the most pause: if you're good enough to be "desperately needed" for this critical pre-funding period, you should be good enough for after, too.
Don't sell yourself short: simply knowing your limits is a major skill, that will let you contribute where you can, grow where you can, and defer to others where you must. Also, having been involved since the start gives knowledge and perspective that can't necessarily be hired elsewhere.
Ultimately if you want to stay -- and especially if you still have the support of your biz cofounder -- you should insist on having the chance to grow with the company, learning as you go along. And the plan for the future needs to be well understood among the principals, before the fundraising, because that process will tend to firm up roles, equity, vesting, employment agreements, etc.
It's true that sometimes a member of the founding team isn't right – the commitment or skills or shared-vision isn't there, and perhaps the original title/status/equity even gets in the way of acquiring what's needed. But it sounds like you're humble and flexible enough that you should be able to retain a key role.
If you are considering leaving from, or think you might be pushed out of, a valuable position, you will likely want to consult with a lawyer, separate from the company lawyer, about how to best protect your rights. (The fundraising process itself, and getting the whole company/team into "standard" documents, could either work to your advantage, or make it very easy for you to be booted with very little, so educate yourself early, to avoid signing away anything valuable.)
If intimidated by the idea of talking to a lawyer, remember that many will give a free 30-60 minute initial consultation, so simply by the act of shopping around, always improving your 'executive summary' of your situation before each discussion, you'll learn a ton at no cost. (No two lawyers will have the exact same analysis, so the 5th or 10th you talk to may still improve your understanding.) And if you find someone you like, they may give you quite a bit of continuing good advice simply in return for the future-chance/option-value of representing you in a future dispute.
Don't sell yourself short: simply knowing your limits is a major skill, that will let you contribute where you can, grow where you can, and defer to others where you must. Also, having been involved since the start gives knowledge and perspective that can't necessarily be hired elsewhere.
Ultimately if you want to stay -- and especially if you still have the support of your biz cofounder -- you should insist on having the chance to grow with the company, learning as you go along. And the plan for the future needs to be well understood among the principals, before the fundraising, because that process will tend to firm up roles, equity, vesting, employment agreements, etc.
It's true that sometimes a member of the founding team isn't right – the commitment or skills or shared-vision isn't there, and perhaps the original title/status/equity even gets in the way of acquiring what's needed. But it sounds like you're humble and flexible enough that you should be able to retain a key role.
If you are considering leaving from, or think you might be pushed out of, a valuable position, you will likely want to consult with a lawyer, separate from the company lawyer, about how to best protect your rights. (The fundraising process itself, and getting the whole company/team into "standard" documents, could either work to your advantage, or make it very easy for you to be booted with very little, so educate yourself early, to avoid signing away anything valuable.)
If intimidated by the idea of talking to a lawyer, remember that many will give a free 30-60 minute initial consultation, so simply by the act of shopping around, always improving your 'executive summary' of your situation before each discussion, you'll learn a ton at no cost. (No two lawyers will have the exact same analysis, so the 5th or 10th you talk to may still improve your understanding.) And if you find someone you like, they may give you quite a bit of continuing good advice simply in return for the future-chance/option-value of representing you in a future dispute.
I hope as a cofounder you signed contracts and have equity.
I'm surprised at all of the responses calling for the CTO to be fired. It's very common to have founders who are very good at the very early stage but lack the experience to scale the technology, the team, the culture and the business.
Ask yourself these questions: * Are the CEO cofound and CTO in cahoots, engaged in a malicious equity grab? If so, you chose partners poorly, move on post-funding. If not, then there's probably something important to listen to here. Then ask: * Are your technical and project execution chops going to take the company to the next level of technical, organizational and business scale? If so, you chose a CTO poorly and your CEO co-founder is a fool, move on post-posting. If not, then you have another choice: * Are there other ways you can help the technology, organization and business grow? If so, discuss that transition instead of an exit. Otherwise, be grateful for the lessons learned and move on post-funding.
In all of the "move on" cases, assess that your equity position is aligned with your contribution to where the company will be when it's ultimately profitable or liquid. If it's still very early stage, that proportion may be very small but it will be better to have a small bit of something successful that a large portion of a failed company.
Set aside ego, consult an attorney (as advised elsewhere), don't engage in scorched earth and figure out if these are people you want to continue working with, you can contribute getting the company to the next level and if so, in what role.
Ask yourself these questions: * Are the CEO cofound and CTO in cahoots, engaged in a malicious equity grab? If so, you chose partners poorly, move on post-funding. If not, then there's probably something important to listen to here. Then ask: * Are your technical and project execution chops going to take the company to the next level of technical, organizational and business scale? If so, you chose a CTO poorly and your CEO co-founder is a fool, move on post-posting. If not, then you have another choice: * Are there other ways you can help the technology, organization and business grow? If so, discuss that transition instead of an exit. Otherwise, be grateful for the lessons learned and move on post-funding.
In all of the "move on" cases, assess that your equity position is aligned with your contribution to where the company will be when it's ultimately profitable or liquid. If it's still very early stage, that proportion may be very small but it will be better to have a small bit of something successful that a large portion of a failed company.
Set aside ego, consult an attorney (as advised elsewhere), don't engage in scorched earth and figure out if these are people you want to continue working with, you can contribute getting the company to the next level and if so, in what role.
The biggest question is what was you and your co-founders' legal agreement in the bylaws/operating agreements regarding equity given in exchange for assigning your IP (earlier code hackery) to the entity?
If you don't have any sort of a defined equity arrangement in legal contracts, then you have a problem. It's time to speak with an attorney.
If you have some sort of share vesting schedule which will grant you an equity ownership percentage that you consider "fair" then you should consider moving from your current operational position as a software engineer to somewhere else if you want to stay in operations. Otherwise you can sit it out, keep your equity, and participate at the board level.
There will be lots of advice to just "forget about it and walk away". I believe the advice to essentially just "sit back and take it" to be idiotic. If your original positioning on the team was to be "the guy who programs the first iteration of the software that gets us to market" and you failed at that, I can understand where they're trying to push you out as a co-founder. You essentially were a technical co-founder who only partially fulfilled his/her original promise. No offence. In their eyes, you misrepresented yourself, even if that's untrue because they scope-creeped way past your skill level. But the fact is that there WAS some weight that was pulled by you. So you deserve at least partial compensation, whether or not its in the form of equity (if this was promised to you) or payment, or both.
There's some important variables here that have't been covered (mainly current legal agreements) but the main point I'd drive home is stand up for yourself and don't allow yourself to get power played. Yes the situation is sour, but you should be able to get the rest of your founders to agree that you DID contribute something, (as evidenced by the fact that the CTO wants you to leave in the future, not now) so you deserve some equity/payment even if you end up just leaving with it and participating in a liquidity event in the future.
TL;DR If no legal agreements: attorney. If legal agreements w/vague equity terms: attorney. If legal agreements w/ defined equity program you can live with: leave operations, participate at the board level, get bought out at a premium, or just hold equity and wait for a liquidity event.
Make sure there's some restrictions keeping the board from authorizing 1000000000000000 shares and diluting you out too. Good luck!
If you don't have any sort of a defined equity arrangement in legal contracts, then you have a problem. It's time to speak with an attorney.
If you have some sort of share vesting schedule which will grant you an equity ownership percentage that you consider "fair" then you should consider moving from your current operational position as a software engineer to somewhere else if you want to stay in operations. Otherwise you can sit it out, keep your equity, and participate at the board level.
There will be lots of advice to just "forget about it and walk away". I believe the advice to essentially just "sit back and take it" to be idiotic. If your original positioning on the team was to be "the guy who programs the first iteration of the software that gets us to market" and you failed at that, I can understand where they're trying to push you out as a co-founder. You essentially were a technical co-founder who only partially fulfilled his/her original promise. No offence. In their eyes, you misrepresented yourself, even if that's untrue because they scope-creeped way past your skill level. But the fact is that there WAS some weight that was pulled by you. So you deserve at least partial compensation, whether or not its in the form of equity (if this was promised to you) or payment, or both.
There's some important variables here that have't been covered (mainly current legal agreements) but the main point I'd drive home is stand up for yourself and don't allow yourself to get power played. Yes the situation is sour, but you should be able to get the rest of your founders to agree that you DID contribute something, (as evidenced by the fact that the CTO wants you to leave in the future, not now) so you deserve some equity/payment even if you end up just leaving with it and participating in a liquidity event in the future.
TL;DR If no legal agreements: attorney. If legal agreements w/vague equity terms: attorney. If legal agreements w/ defined equity program you can live with: leave operations, participate at the board level, get bought out at a premium, or just hold equity and wait for a liquidity event.
Make sure there's some restrictions keeping the board from authorizing 1000000000000000 shares and diluting you out too. Good luck!
Without knowing any of the specifics--how long you've been in business, how much you've raised so far, the number of employees, the market opportunity, competitive landscape, runway, how much experience you and your other founder had, how much experience the CTO had, etc, etc, etc--I can't imagine trying to give you any advice other than to...
1) Ask yourself these questions:
* Did I get into this for a quick payday or to build a business?
* How could I best contribute to the business if I stayed? Is that something I want to do?
* Are these people I'd want to stay and work with indefinitely?
* If I had to walk away today and give up all my stock, what dollar value would I put on my contributions (both assets and effort) to date?
* If I had to walk away today, how much cash would I need to comfortably cover the downtime until I find what's next?
2) Talk to a personal attorney who has some experience working with start-ups, fundraising, etc. Someone who's negotiated founder contracts and separation agreements.
3) If you know them well enough, talk to the board, advisors, and/or investors who participated in your last round and ask their advice.
If they want you to leave after the next round, then that probably needs to be part of the conversations with potential investors. If you're a founder and have a large chunk of stock, it's not unlikely that they'd want to buy most or all of it back from you with proceeds from the next round.
1) Ask yourself these questions:
* Did I get into this for a quick payday or to build a business?
* How could I best contribute to the business if I stayed? Is that something I want to do?
* Are these people I'd want to stay and work with indefinitely?
* If I had to walk away today and give up all my stock, what dollar value would I put on my contributions (both assets and effort) to date?
* If I had to walk away today, how much cash would I need to comfortably cover the downtime until I find what's next?
2) Talk to a personal attorney who has some experience working with start-ups, fundraising, etc. Someone who's negotiated founder contracts and separation agreements.
3) If you know them well enough, talk to the board, advisors, and/or investors who participated in your last round and ask their advice.
If they want you to leave after the next round, then that probably needs to be part of the conversations with potential investors. If you're a founder and have a large chunk of stock, it's not unlikely that they'd want to buy most or all of it back from you with proceeds from the next round.
Keep in mind there is a strong conflict of interest. The business guys love to squeeze out the tech after launch or before a funding round to keep a bigger slice of the pie. Often they won't say that's why they are doing it, but bizarre things will happen like they'll promise to do things then not do them just to start a fight, etc..
I used to work for a startup called WorkSmart Labs. They got Google Ventures funding, but when they knew it would close they go me to agree to take a lot more vesting equity for several months. In exchange they were supposed to help with some things to help my wife's green card process - changing addresses I was taxed and paid at to a joint residence, joint health insurance, etc.. They were happy to pay me less cash, never did the paperwork they promised, and ditched me right when the deal closed so the unvested equity was worthless.
You should watch out for similar very dirty behavior. I don't know if you are in SV, but we hear people all the time talking about things like writing every single line of code for the product, then getting kicked out after funding.
I used to work for a startup called WorkSmart Labs. They got Google Ventures funding, but when they knew it would close they go me to agree to take a lot more vesting equity for several months. In exchange they were supposed to help with some things to help my wife's green card process - changing addresses I was taxed and paid at to a joint residence, joint health insurance, etc.. They were happy to pay me less cash, never did the paperwork they promised, and ditched me right when the deal closed so the unvested equity was worthless.
You should watch out for similar very dirty behavior. I don't know if you are in SV, but we hear people all the time talking about things like writing every single line of code for the product, then getting kicked out after funding.
I wonder how your co-founder will feel when the VC's ask him to leave because he's "just not what the company needs at this time"?
Whose company is this, you and your co-founder's or the CTO's?
Whose company is this, you and your co-founder's or the CTO's?
You helped build something to a point that a job position was created for the CTO, and if you are passionate about what you're working on and eager to learn, it's unfortunate that he took the approach of telling you that you "are not good enough" rather than mentoring you and helping you grow as a developer. I'm sorry for your situation, it's rough.
That said, is this someone who you want to be working closely with? It could be something in your work relationship that is hard to get past. As others have said, understand what you are entitled to in terms of contracts and equity, and try having an open conversation with the CEO if you haven't already. Handle it professionally, and keep in mind that if you are desperately needed now (as you said) that you have some bargaining leverage. :)
That said, is this someone who you want to be working closely with? It could be something in your work relationship that is hard to get past. As others have said, understand what you are entitled to in terms of contracts and equity, and try having an open conversation with the CEO if you haven't already. Handle it professionally, and keep in mind that if you are desperately needed now (as you said) that you have some bargaining leverage. :)
Maybe he is telling you the truth, but you are a founder, he is a CTO. Maybe it is just a simple case if you are currently contributing code to the idea to step back and let this other guy handle the coding aspect for you. Maybe you can better spend your time as a co-founder elsewhere in your company.
Having said that, if he is forcefully advising you to leave, he is overstepping his boundaries and you need to contain that fire now before he starts turning other employees against you. A toxic employee in a company is like a cancer, it will start in one area and if not treated, it will spread throughout every orifice in your body until it kills you.
If it is a simple matter of you're making it hard for the CTO to do his job because you're committing code and continually breaking things, maybe you need to step back and let him do his job. He can't force you out of your own company, but he might have enough collateral (if he is truly instrumental in your company's success) to get other people to listen to him and force them to make a decision. The CTO is either brutally honest, he's an asshole or he's gunning for your spot in the company.
I would be looking at this from all angles. Don't just assume the CTO is acting alone, for all you know the CEO or your business part is instrumental in his push for you to leave. You're not just an employee, you're a co-founder and you have rights and responsibilities. You're acting like the CTO has already one which will be your downfall. Exercise your rights as a co-founder to fix this.
I would seriously fire the CTO. He might have been instrumental in the companies success, but he has overstepped the line. He has gone beyond the point of merely telling someone they're making his job hard, he's asking a co-founder to leave. It's like some manager at Microsoft asking the CEO to step-down, it's just crazy.
Get legal advice ASAP. Explore your options, but without-a-doubt, get legal counsel right away before you do anything else. My first question to your lawyer would be: Can I fire the CTO cleanly without recourse?
Having said that, if he is forcefully advising you to leave, he is overstepping his boundaries and you need to contain that fire now before he starts turning other employees against you. A toxic employee in a company is like a cancer, it will start in one area and if not treated, it will spread throughout every orifice in your body until it kills you.
If it is a simple matter of you're making it hard for the CTO to do his job because you're committing code and continually breaking things, maybe you need to step back and let him do his job. He can't force you out of your own company, but he might have enough collateral (if he is truly instrumental in your company's success) to get other people to listen to him and force them to make a decision. The CTO is either brutally honest, he's an asshole or he's gunning for your spot in the company.
I would be looking at this from all angles. Don't just assume the CTO is acting alone, for all you know the CEO or your business part is instrumental in his push for you to leave. You're not just an employee, you're a co-founder and you have rights and responsibilities. You're acting like the CTO has already one which will be your downfall. Exercise your rights as a co-founder to fix this.
I would seriously fire the CTO. He might have been instrumental in the companies success, but he has overstepped the line. He has gone beyond the point of merely telling someone they're making his job hard, he's asking a co-founder to leave. It's like some manager at Microsoft asking the CEO to step-down, it's just crazy.
Get legal advice ASAP. Explore your options, but without-a-doubt, get legal counsel right away before you do anything else. My first question to your lawyer would be: Can I fire the CTO cleanly without recourse?
Sorry to barge in on this thread - but I have a question that turns this on its head.
Let's say you are a brilliant CTO/cofounder, but you are already doing something. Now you had this idea (or someone else had this idea) ... and you want to set them up for seed/series-A round and then you want to leave. assumption - you trust the CEO to not screw you.
How do you structure your equity compensation so that you have some benefit after 5 years? One of the thoughts I had was to show the short-term CTO as an investor with vested stock (in return for some negligible investment ... say 100$). Does this protect you from future investor rounds ?
Let's say you are a brilliant CTO/cofounder, but you are already doing something. Now you had this idea (or someone else had this idea) ... and you want to set them up for seed/series-A round and then you want to leave. assumption - you trust the CEO to not screw you.
How do you structure your equity compensation so that you have some benefit after 5 years? One of the thoughts I had was to show the short-term CTO as an investor with vested stock (in return for some negligible investment ... say 100$). Does this protect you from future investor rounds ?
You don't need to be set up as an investor. You can structure shareholder agreements and different stock classes etc. pretty much as you please, or directly award vested stock (beware your local tax rules if awarding/being awarded vested stock in a pre-existing company - chances are good it'll be taxed as income based on some estimate of market value; but if you enter from the start, as a founder, that's not an issue).
The issue in that respect is not what you legally can do, but structuring it in a way that won't scare away investors with too much complexity.
Generally, though, nothing will "protect you from future investor rounds" if they really want to fuck you over, other than being diligent and keeping a lawyer around, and picking honest co-founders. If the investors coming in and other still employed founder(s) wants to mess things up for you, it can be tricky to protect against them diluting your share holdings to next to nothing, for example (e.g. do a round on a very low valuation; issue large amount of options to remaining founders to make up for the extra dilution they take). Of course, if investors try to do that, chances are they'll screw the remaining founders first chance they get too.
The issue in that respect is not what you legally can do, but structuring it in a way that won't scare away investors with too much complexity.
Generally, though, nothing will "protect you from future investor rounds" if they really want to fuck you over, other than being diligent and keeping a lawyer around, and picking honest co-founders. If the investors coming in and other still employed founder(s) wants to mess things up for you, it can be tricky to protect against them diluting your share holdings to next to nothing, for example (e.g. do a round on a very low valuation; issue large amount of options to remaining founders to make up for the extra dilution they take). Of course, if investors try to do that, chances are they'll screw the remaining founders first chance they get too.
Ask for the same terms as the founders, and ask for a big enough stake that you have something left after a prospective Series B round assuming 20-25% watering down in each round. That makes it so that the founders have to do to themselves what they do to you so your interests are aligned.
A few question of business.
Are you a shareholder of the company and have company equity ?
Yes - just ignore him.
No - just leave the company.
Is is a startup whom promised equity if the company profit /ipo and no pen paper to prove it Yes -leave the company. No - just ignore him.
Most CTO(Chief Technical Officer) and CEO (Chief Execute Officer) are hired by director /co-founder of the company. So nothing he/she will said will effect you(shareholder of the company) at all. If he /she proceed with firing process,said you're ain't director/co-founder.So please do it.
Is is a startup whom promised equity if the company profit /ipo and no pen paper to prove it Yes -leave the company. No - just ignore him.
Most CTO(Chief Technical Officer) and CEO (Chief Execute Officer) are hired by director /co-founder of the company. So nothing he/she will said will effect you(shareholder of the company) at all. If he /she proceed with firing process,said you're ain't director/co-founder.So please do it.
I think you need to be realistic: this situation has gone toxic and it's not likely that you're going to be involved in a few months time. Once you have internalized this and you're still breathing, it will become easier to see the positives.
As others have said, it's highly likely that the CTO and CEO are working together on this. The best thing you can do is - with the assistance of your lawyer - extract yourself as quickly and cleanly as you can manage. Try not to burn bridges; legitimately hope that they succeed. After all, you will retain a substantial percentage of the company.
I can't know the details but from the way you describe the situation, I'm somewhat empathetic to the position that the CTO finds himself in. Your only claim to power is that you were there at the beginning. While that's not a small detail, it's often true that the people who are vitally important to a company in the beginning end up being minor players in the future. See: Craig Newmark or the early support reps at eBay.
In short: you're a founder who is probably no longer playing an irreplaceable role in your company. The CTO wants a meritocracy, and when you're a small team shooting for growth, a founder with just enough tech chops to be a distraction is a major source of risk. To this end, I am surprised that they didn't give you notice already.
I don't say any of this to be mean, it's just that these relationships are hard and most people let awkwardness keep them from telling the hard truth.
As others have said, it's highly likely that the CTO and CEO are working together on this. The best thing you can do is - with the assistance of your lawyer - extract yourself as quickly and cleanly as you can manage. Try not to burn bridges; legitimately hope that they succeed. After all, you will retain a substantial percentage of the company.
I can't know the details but from the way you describe the situation, I'm somewhat empathetic to the position that the CTO finds himself in. Your only claim to power is that you were there at the beginning. While that's not a small detail, it's often true that the people who are vitally important to a company in the beginning end up being minor players in the future. See: Craig Newmark or the early support reps at eBay.
In short: you're a founder who is probably no longer playing an irreplaceable role in your company. The CTO wants a meritocracy, and when you're a small team shooting for growth, a founder with just enough tech chops to be a distraction is a major source of risk. To this end, I am surprised that they didn't give you notice already.
I don't say any of this to be mean, it's just that these relationships are hard and most people let awkwardness keep them from telling the hard truth.
TL;DR; There's nothing wrong with a vesting schedule.
It's an interesting point, how should founder sweat equity versus founder capital contribution vest? And then of course there's investor equity...
Can cash from a VC be treated differently from cash from an employee/founder? Of course it can, you have different shares, with different terms, and a different value per share.
In the end, whatever terms you negotiate for your shares should be used to value those shares. 3 year vesting, for example, sounds like a valuable feature for the company, so you would expect those shares to sell for [much] less than fully vested shares.
So the point is, you should definitely ask for accelerated vesting, and I think it's customary to do this at least for a portion of share to at least cover the cash and the months worked.
The realist part of me says, either you can fix the working relationship and contribute good value, and have a good enough time doing it, or you can't. If you can't, the best thing you can do for your company may possibly be to step aside. By all means fight to change their minds, and find the RIGHT solution for all of you.
In any case, you should be happy to continue to hold some portion of shares. If they want them to be non-voting, that's just another way to decrease their value, so you should ask for a commensurate increase in share count.
It's an interesting point, how should founder sweat equity versus founder capital contribution vest? And then of course there's investor equity...
Can cash from a VC be treated differently from cash from an employee/founder? Of course it can, you have different shares, with different terms, and a different value per share.
In the end, whatever terms you negotiate for your shares should be used to value those shares. 3 year vesting, for example, sounds like a valuable feature for the company, so you would expect those shares to sell for [much] less than fully vested shares.
So the point is, you should definitely ask for accelerated vesting, and I think it's customary to do this at least for a portion of share to at least cover the cash and the months worked.
The realist part of me says, either you can fix the working relationship and contribute good value, and have a good enough time doing it, or you can't. If you can't, the best thing you can do for your company may possibly be to step aside. By all means fight to change their minds, and find the RIGHT solution for all of you.
In any case, you should be happy to continue to hold some portion of shares. If they want them to be non-voting, that's just another way to decrease their value, so you should ask for a commensurate increase in share count.
Ultimately the question is, of how much share of the company should you continue to hold?
Which can also be thought of as, how much share has been earned before you leave, and how much additional may be earned even after you leave?
So another option to consider is to step aside functionality, but remain as an employee so that options continue to vest, and get proportional employee benefits. This moderates some of the financial impacts (like being force to pay for your shares right then, and losing possible employee benefits) for some period of time.
I didn't get a really clear view of how many employees the company has, to understand where on the growth curve you guys are running? But another way to think of this is you are a highly motivated employee, who was smart enough to get this thing started and truly committed to the cause. So who in their right mind would turn away an employee like that?! From what you've told us, I think the CEO and CTO are idiots if they can't figure out a productive way to work with you.
Which can also be thought of as, how much share has been earned before you leave, and how much additional may be earned even after you leave?
So another option to consider is to step aside functionality, but remain as an employee so that options continue to vest, and get proportional employee benefits. This moderates some of the financial impacts (like being force to pay for your shares right then, and losing possible employee benefits) for some period of time.
I didn't get a really clear view of how many employees the company has, to understand where on the growth curve you guys are running? But another way to think of this is you are a highly motivated employee, who was smart enough to get this thing started and truly committed to the cause. So who in their right mind would turn away an employee like that?! From what you've told us, I think the CEO and CTO are idiots if they can't figure out a productive way to work with you.
And here HN shows it's true colors. It's all about competence and meritocracy until it affects a founder.
I've seen companies being run into the ground because founders remained in positions they weren't competent for. My guess is the CTO has seen the same, and he has no intention of taking the fall for that.
No, he hasn't overstepped his boundaries, if this kind of situation continuous he may as well hand in his own resignation. He's doing what he's been hired to do.
I've seen companies being run into the ground because founders remained in positions they weren't competent for. My guess is the CTO has seen the same, and he has no intention of taking the fall for that.
No, he hasn't overstepped his boundaries, if this kind of situation continuous he may as well hand in his own resignation. He's doing what he's been hired to do.
Clearly, you are not being valued in this company. At best they are looking at you as cheap labour for next 3-6 months. At worst, you are a founder and a founder leaving is going to raise questions during funding. (Thats why he wants you to leave after 3-6 months after you have raised and not before).
Did you have a launched product/customers when the CTO joined? From your post, I gather that is a no. If so, then your CTO feels you don't deserve your stock. Him and your CEO are trying to cut you off.
Your CEO has not supported you either. He should have been the one talking to you. Not someone you hired unless the CTO has more stake than you which seems unlikely.
If he really thinks you are no longer the right fit for the company, he should have offered to vest you for your money and the time you have put in. And if your work is "not good enough" they should be asking you to leave immediately and not when it is convenient for them. You can't be both needed desperately and not good enough at the same time. To that end, I feel your CTO's ask immature, short sighted and greedy to say the least.
Talk to a lawyer, figure out a deal you could be okay with, try and get that and leave. Them yet to raise another round is a good bargaining chip for you.
Did you have a launched product/customers when the CTO joined? From your post, I gather that is a no. If so, then your CTO feels you don't deserve your stock. Him and your CEO are trying to cut you off.
Your CEO has not supported you either. He should have been the one talking to you. Not someone you hired unless the CTO has more stake than you which seems unlikely.
If he really thinks you are no longer the right fit for the company, he should have offered to vest you for your money and the time you have put in. And if your work is "not good enough" they should be asking you to leave immediately and not when it is convenient for them. You can't be both needed desperately and not good enough at the same time. To that end, I feel your CTO's ask immature, short sighted and greedy to say the least.
Talk to a lawyer, figure out a deal you could be okay with, try and get that and leave. Them yet to raise another round is a good bargaining chip for you.
Are you good at seeing the products that need to be created? Writing 'running specification' code (hacking things up)? Do you understand the product space well? Who owns product? Is this something you do or could do? How good is your relationship with your cofounder? There is a lot more that involves tech understanding to be done in a startup than architecture, coding, and managing architecture and coding.
I'm imagining two scenarios. Either...
A) You are in fact inexperienced and are damaging the product with your code. If you have less than a year or two of programming (that includes one of those code "bootcamps" too...), then he's probably right. I would probably view you as dead weight, and would not want you on the team.
Or
B) You actually aren't that bad and could contribute to the product positively... especially if it's something like a RoR or Django app which is not the hardest thing to pickup w/o an extensive programming/CS background. In this case, your CTO is possibly an elitist prick. I've worked for a CTO who had pointlessly high standards, especially it being a pre-funded startup where, for example, he shouldn't be freaking out about a few lines of redundancy. He churned through a lot of programmers, was all very inefficient, and I certainly felt like he was power tripping at times. Even if this CTO guy is really good, if he has an abrasive personality and does stuff like I described above, for the sake of the team he should be the one to go. If your product is going places he shouldn't be too hard to replace.
A) You are in fact inexperienced and are damaging the product with your code. If you have less than a year or two of programming (that includes one of those code "bootcamps" too...), then he's probably right. I would probably view you as dead weight, and would not want you on the team.
Or
B) You actually aren't that bad and could contribute to the product positively... especially if it's something like a RoR or Django app which is not the hardest thing to pickup w/o an extensive programming/CS background. In this case, your CTO is possibly an elitist prick. I've worked for a CTO who had pointlessly high standards, especially it being a pre-funded startup where, for example, he shouldn't be freaking out about a few lines of redundancy. He churned through a lot of programmers, was all very inefficient, and I certainly felt like he was power tripping at times. Even if this CTO guy is really good, if he has an abrasive personality and does stuff like I described above, for the sake of the team he should be the one to go. If your product is going places he shouldn't be too hard to replace.
Wow... now that is a pickle.
Take a step back. Is his criticism sound? If in a perfect scenario, where you had a real development team, would you be the weak link? Is that true?
If the answer is yes... and you still feel passionately about the work the company is doing. Talk to your partner and find a position you can transition into. Don't hold back the company's progress because you want you're own private lesson in enterprise development.
If its not... Discuss firing this guy immediately... Nothing will destroy a company faster than disharmony among the core group. You and your partner have to be on the same page. There cannot be a little birdie sowing the seeds of insurrection. Hand this guy his hat and find someone else. Don't think about it just do it.
Only do this after you've thought thru his comments and objectively come to a conclusion about them. Consultants are paid to deliver the hard truth, and sometimes it may sting, but you'll get over it.
If it's time for you to leave... or that's the direction its headed. Get your equity memorialized fast while you're needed... don't let anyone sleep on that.
Good luck kid...
Take a step back. Is his criticism sound? If in a perfect scenario, where you had a real development team, would you be the weak link? Is that true?
If the answer is yes... and you still feel passionately about the work the company is doing. Talk to your partner and find a position you can transition into. Don't hold back the company's progress because you want you're own private lesson in enterprise development.
If its not... Discuss firing this guy immediately... Nothing will destroy a company faster than disharmony among the core group. You and your partner have to be on the same page. There cannot be a little birdie sowing the seeds of insurrection. Hand this guy his hat and find someone else. Don't think about it just do it.
Only do this after you've thought thru his comments and objectively come to a conclusion about them. Consultants are paid to deliver the hard truth, and sometimes it may sting, but you'll get over it.
If it's time for you to leave... or that's the direction its headed. Get your equity memorialized fast while you're needed... don't let anyone sleep on that.
Good luck kid...
I think the first question to ask yourself is "What do YOU want to do?"
If you did the coding from scratch to bootstrap your product but don't see yourself as a developer in the long term, then it is all fine: you find yourself other responsibilities in your company (and there will be many to take care of) and let your CTO take care of the developments and hires in the tech team.
On the other hand, if you did this to actually learn to be a good developer reuse that skill later (eg. launch another startup later) then you fall into the questions answered in other replies: is it political or is it only about code quality? (If it is about code quality, maybe your CTO is a jerk saying it this way, but for the sake of your product, it can be logical that you'd be out of its developments...)
As from my own experience, my guess is that you are in between those two situations. In my case, here are the reasons why I was:
- it was good fun bootstrapping the product with little constraints (small team, little production code, few processes, 100% reliability not mandatory etc.): I want to keep doing this
- it can be useful to gain experience into the getting big (team, code base, user base etc.) even if it is less fun
As for now, my best answer to this dilemma is to:
1. know you skills really well to know your value
2. keep innovating as much as possible: when being an entrepreneur (cofounder), your first required talent is not to make sure your code is 100% clean/safe etc. neither is it about having hard processes, but to create new things, to trust your ideas and to make them real. As a matter of fact, YOU cofounded your startup, not your CTO, so remember you have this skill and USE IT!
If you did the coding from scratch to bootstrap your product but don't see yourself as a developer in the long term, then it is all fine: you find yourself other responsibilities in your company (and there will be many to take care of) and let your CTO take care of the developments and hires in the tech team.
On the other hand, if you did this to actually learn to be a good developer reuse that skill later (eg. launch another startup later) then you fall into the questions answered in other replies: is it political or is it only about code quality? (If it is about code quality, maybe your CTO is a jerk saying it this way, but for the sake of your product, it can be logical that you'd be out of its developments...)
As from my own experience, my guess is that you are in between those two situations. In my case, here are the reasons why I was:
- it was good fun bootstrapping the product with little constraints (small team, little production code, few processes, 100% reliability not mandatory etc.): I want to keep doing this
- it can be useful to gain experience into the getting big (team, code base, user base etc.) even if it is less fun
As for now, my best answer to this dilemma is to:
1. know you skills really well to know your value
2. keep innovating as much as possible: when being an entrepreneur (cofounder), your first required talent is not to make sure your code is 100% clean/safe etc. neither is it about having hard processes, but to create new things, to trust your ideas and to make them real. As a matter of fact, YOU cofounded your startup, not your CTO, so remember you have this skill and USE IT!
I always thought that it would be good to have an agreement with my cofounders that if ever a compromise cannot be reached, a "roll of the dice" will be used to decide the question in contention. (By "roll of the dice", I mean the probability that the course of action favored by investor A prevails is proportional to the amount of stock held by that investor.)
But I've never seen any references to a startup that actually uses such an arrangement. (What I have seen a lot is the notion or principle that the investor or coalition of investors with at least 50% of the outstanding stock decides, which does not seem to me to protect the interests of minority shareholders as well.)
Do any lawyers want to offer a guess as to whether a contract between cofounders (or between cofounders and investors) with such a "roll-the-dice" clause in it would be enforceable in the California courts?
P.S. Also, am I completely crazy or are most of the comment authors here wrong in implying that whether the OP will prevail in court has anything significant to do with how good a programmer he is?
But I've never seen any references to a startup that actually uses such an arrangement. (What I have seen a lot is the notion or principle that the investor or coalition of investors with at least 50% of the outstanding stock decides, which does not seem to me to protect the interests of minority shareholders as well.)
Do any lawyers want to offer a guess as to whether a contract between cofounders (or between cofounders and investors) with such a "roll-the-dice" clause in it would be enforceable in the California courts?
P.S. Also, am I completely crazy or are most of the comment authors here wrong in implying that whether the OP will prevail in court has anything significant to do with how good a programmer he is?
Cannot stress more on the part about writing/archiving everything. Relationships between the founders, during the very early days of a startup can swing between extreme brotherhood to extremely sceptical. Everyone is bearing the brunt of pressure and if things are not moving, it is human to delegate the responsibility of performance onto the other guy.
I started a content-based startup in my college, and created much of the content myself. The trust that I bestowed upon my other co-founder was futile though. In the end, when things weren't looking up much, he ended up with not giving back the original content to me at all. Since the content was in the form of hand-drawn cartoon strips, I was just left with nothing. I saved up emails, but they didn't achieve much.
In the future, the other co-founder tried to do things his way, but he didn't pursue the idea further, and all my hard work of creating just went down the drain. Make sure it doesn't happen to you.
Do you own half/part of the company?
If he wants you to leave you should still be entitled to half/part of the company, feel free to leave.
Do what YOU think is best for the company. <--
If for some reason you've been swindled out of owning half/part (or some portion, equivalent to the start-up split) of the company, I think you have a bigger issue outside the scope of this question.
If he wants you to leave you should still be entitled to half/part of the company, feel free to leave.
Do what YOU think is best for the company. <--
If for some reason you've been swindled out of owning half/part (or some portion, equivalent to the start-up split) of the company, I think you have a bigger issue outside the scope of this question.
Many people have already made the bad guy out of the CTO. But in my point of view, he's not.
You do admit that your skill is not up to par yet, so in a sense, you are a dead weight to the company (though you are improving, but it's better if you can just hire another good dev)
Now I'm not saying that you should quit the company (hell, it's your company). Remain as a co-founder, or a member of the board of director, or become product owner, agile master whatever you name it, just not a dev. If you really mean it, you can take a pause in your product development, learn more first, then re-join the team, let the team asset your skills to see if you are up to par.
Take a deep breath, and think about the future of the company. Whatever products you are developing, would it sustain this harsh world with your skills? This is the whole point of your decision.
TL;DR: if you are bad, leave the dirty job to others.
You do admit that your skill is not up to par yet, so in a sense, you are a dead weight to the company (though you are improving, but it's better if you can just hire another good dev)
Now I'm not saying that you should quit the company (hell, it's your company). Remain as a co-founder, or a member of the board of director, or become product owner, agile master whatever you name it, just not a dev. If you really mean it, you can take a pause in your product development, learn more first, then re-join the team, let the team asset your skills to see if you are up to par.
Take a deep breath, and think about the future of the company. Whatever products you are developing, would it sustain this harsh world with your skills? This is the whole point of your decision.
TL;DR: if you are bad, leave the dirty job to others.
Interesting. I was just thinking, do the CTO and the CEO know each other from before? Was it the CEOs idea to hire this CTO maybe? If that's the case maybe this was planned between the CTO and CEO.
Since you're the founder with the focus on the tech aspect (basically you should be the CTO) what was the reason for hiring the CTO in the first place? A CTO that's obviously not a better software developer than you. Hard facts, but maybe it was your partner who planned this since the very beginning.
After you've talked to your lawyer you could possibly strike a deal with the CTO / CEO and go become an employee if you are interested in just keeping on coding for the company. Maybe getting a bonus that if you decide to leave or still be on the companies payroll provided that the company reach a certain revenue / value etc.
Since you're the founder with the focus on the tech aspect (basically you should be the CTO) what was the reason for hiring the CTO in the first place? A CTO that's obviously not a better software developer than you. Hard facts, but maybe it was your partner who planned this since the very beginning.
After you've talked to your lawyer you could possibly strike a deal with the CTO / CEO and go become an employee if you are interested in just keeping on coding for the company. Maybe getting a bonus that if you decide to leave or still be on the companies payroll provided that the company reach a certain revenue / value etc.
"A CTO that's obviously not a better software developer than you."
What? The OP clearly points out the CTO is a better developer.
What? The OP clearly points out the CTO is a better developer.
you should also read what OP is posting here in the thread.
" > if you have hired a CTO who is better at engineering than you
He doesn't do development himself(he does review everything before it goes into the production branch), simply that he knows better developers than I.
I have re-written much of our original code to a point where it is of good quality, both in it's intended role and in readability. "
The CTO hasn't written any production code so his software skills are questionable. The OP belives his current code is of good quality right now.
" > if you have hired a CTO who is better at engineering than you
He doesn't do development himself(he does review everything before it goes into the production branch), simply that he knows better developers than I.
I have re-written much of our original code to a point where it is of good quality, both in it's intended role and in readability. "
The CTO hasn't written any production code so his software skills are questionable. The OP belives his current code is of good quality right now.
[Not an expert here, just offering another perspective.]
First of all, the CTO telling you he wouldn't hire you at the company you founded is [can't find a polite term]. It's reasonable to say something specific about you is subpar (like coding), and even that you wouldn't fit in a certain role he's planning to define (like full-time coder).
But this is (partially) your company, and an "experienced" CTO came to you because he saw something there. Unless your other partners did all the useful work, you've got some real value -- don't sell yourself short.
There are a lot of options here and you can really make the path for yourself. What is great about you that helped make the company into something? What kind of a role would allow those capabilities to flourish? You could call yourself a Chief Product Officer and say that you have control over what gets delivered and when, what directions the product will take, etc. (not sure if that's what a CPO does, but it doesn't matter).
If you are still inspired to go forward with this startup, and you see such a role for yourself, go make that case. For example, tell the CTO and the CEO that you intend to shed your coding responsibilities as the CTO builds that organization, and get them excited about what you can do as CPO (or whatever). Demand real responsibilities and control, and say that you have the best understanding of the product and the best vision for the future. You could end up much more influential than the CTO, who might end up just being responsible for delivering on your visions. Their whole perspective of you might change, and they might get behind you.
If you've lost inspiration, then probably a buyout makes sense. Again, don't sell yourself short -- you helped get the company this far, and did something right. Considering the risk you took, and probably low pay, it seems fair to get about 2X a fully-loaded engineer's cost for the time you were working full-time there. If your company is doing well maybe significantly more (again, not an expert, just a gut feel).
First of all, the CTO telling you he wouldn't hire you at the company you founded is [can't find a polite term]. It's reasonable to say something specific about you is subpar (like coding), and even that you wouldn't fit in a certain role he's planning to define (like full-time coder).
But this is (partially) your company, and an "experienced" CTO came to you because he saw something there. Unless your other partners did all the useful work, you've got some real value -- don't sell yourself short.
There are a lot of options here and you can really make the path for yourself. What is great about you that helped make the company into something? What kind of a role would allow those capabilities to flourish? You could call yourself a Chief Product Officer and say that you have control over what gets delivered and when, what directions the product will take, etc. (not sure if that's what a CPO does, but it doesn't matter).
If you are still inspired to go forward with this startup, and you see such a role for yourself, go make that case. For example, tell the CTO and the CEO that you intend to shed your coding responsibilities as the CTO builds that organization, and get them excited about what you can do as CPO (or whatever). Demand real responsibilities and control, and say that you have the best understanding of the product and the best vision for the future. You could end up much more influential than the CTO, who might end up just being responsible for delivering on your visions. Their whole perspective of you might change, and they might get behind you.
If you've lost inspiration, then probably a buyout makes sense. Again, don't sell yourself short -- you helped get the company this far, and did something right. Considering the risk you took, and probably low pay, it seems fair to get about 2X a fully-loaded engineer's cost for the time you were working full-time there. If your company is doing well maybe significantly more (again, not an expert, just a gut feel).
Well, seems like most of the answers here are repeating pretty much the same mantra of this CTO being a douchebag and the champion founder being obviously correct. Please allow me to offer an alternative viewpoint.
I've seen some founders, especially of the technical variety, who manage to get a business running and then attribute all of that to their personal brilliance, and that they therefore deserve all the power in the company. This means that they will be extremely toxic personalities for everyone else, which in turn can easily stunt a company.
I don't know if this is the case here, since we only hear this from your perspective... but it may be that it's not your coding skill actually that is in question, but your interpersonal skills and attitude.
I've seen some founders, especially of the technical variety, who manage to get a business running and then attribute all of that to their personal brilliance, and that they therefore deserve all the power in the company. This means that they will be extremely toxic personalities for everyone else, which in turn can easily stunt a company.
I don't know if this is the case here, since we only hear this from your perspective... but it may be that it's not your coding skill actually that is in question, but your interpersonal skills and attitude.
Two ways to look a this problem:
Point of View 1:
Did you hire this CTO to make your company succeed? If so, then listen to his expertise and move the f* out of the way. Do not interfere with those who understand what they're doing. Ever.
Point of View 2:
What exactly does the other guy do? Business? What is that, exactly? Ordering pizza? And why can you not do the same thing? If you don't have a set role, then make one up.
Here's my $0.02 (Similar to POV 1):
In business, there is no room for emotions. You have to do what's right: Leave. If you lack the qualifications to contribute in a productive way, then find other people who can, and your company will have a higher likelihood of success. Just sit back, and relax. Make sure you walk away with a nice chunk of equity though, and you'll live a happy life.
Point of View 1:
Did you hire this CTO to make your company succeed? If so, then listen to his expertise and move the f* out of the way. Do not interfere with those who understand what they're doing. Ever.
Point of View 2:
What exactly does the other guy do? Business? What is that, exactly? Ordering pizza? And why can you not do the same thing? If you don't have a set role, then make one up.
Here's my $0.02 (Similar to POV 1):
In business, there is no room for emotions. You have to do what's right: Leave. If you lack the qualifications to contribute in a productive way, then find other people who can, and your company will have a higher likelihood of success. Just sit back, and relax. Make sure you walk away with a nice chunk of equity though, and you'll live a happy life.
I'd move against him, and quickly. Tell the CEO you need unity not divisiveness. You are all for working with the new CTO but he is trying to force you out of the company you founded. There is only one way to deal with people like this: decisively. The fact that you've come here to ask for opinions on this matter suggests that you may lack the inner confidence to survive in a startup. Take this as a learning opportunity. Bone up on your technical skills, hire people smarter than you. Realize that you've been identified as a less than top-tier software developer and use that information to help you figure out where your skills can best help the company succeed. Good luck, move now and go for the jugular.
First of all the CTO was hired to fix the shit they were hired for. Secondly, that amount of disrespect from a new employee who did not risk anything to start a start-up should be fired immediately. Kick that a-hole to the curb as they will be a cancer in the company.
Fire. CTO. NOW.
You are a co-founder, not an employee. Remember that. It is you company, he works for you. If you would be hired in an company, would you dare to ask to the owner of the company to leave?? It doesn't matter how good or bad are you for the company, it is your company!
Fire him now.
You are a co-founder, not an employee. Remember that. It is you company, he works for you. If you would be hired in an company, would you dare to ask to the owner of the company to leave?? It doesn't matter how good or bad are you for the company, it is your company!
Fire him now.
Consider the possibility that he's right. The best thing for the company may be that you stop writing code. There also may not be another place for you at the company. Most of the posters seem to assume that whoever posts to HN first is the visionary genius without whom the company will fail. Maybe you're the guy who had the good idea and got it off the ground, but not the best one to make it production ready.
You may want to move into a product management role or you may want to leave. Regardless of what you think is going to happen, you need to clear up all vagueness around your equity and ensure you are going to keep your stake if you leave. You need to review your paperwork and probably talk to a lawyer.
You may want to move into a product management role or you may want to leave. Regardless of what you think is going to happen, you need to clear up all vagueness around your equity and ensure you are going to keep your stake if you leave. You need to review your paperwork and probably talk to a lawyer.
Just like a founder is often not the best runtime CEO, a founder is often not the best programmer.
"A few months" is short of the required experience for a senior software engineer by an order of magnitude. Engineers without experience cause debt that makes the code cost more to maintain over time. All of this is true.
Why did you start up in the first place? To change the world, or to have a place to hang out, or to learn things? Is there another place you can do that better now, at less cost?
Either find a niche where you are creating significant value in the current state of things, or get out to make room. Ask for a negotiated agreement with accelerated vesting of your options if you're not already owning.
Why did you start up in the first place? To change the world, or to have a place to hang out, or to learn things? Is there another place you can do that better now, at less cost?
Either find a niche where you are creating significant value in the current state of things, or get out to make room. Ask for a negotiated agreement with accelerated vesting of your options if you're not already owning.
It's your company. Even if one aspect of the company has outgrown your abilities, you could definitely find other ways to contribute. Your cofounder ought to be someone you trust. If so, this is something you should also discuss with your cofounder.
Aside from the legal aspect, there are two others I think are important.
1) As a founder, you need to do what's best for the company. Whatever that is.
2) You're one of the owners. If you didn't have all the skills required for every aspect, at least you showed up and it got done. You can hire in whatever skills you need, including bringing in a CTO who knows more than you did. Maybe you aren't the right person to run the technical side, etc, but don't be muscled out just because someone is better than you are. Frankly you and the CEO need to stick together - if it's that easy to separate you what stops him from being thrown to the curb when there's a better business guy?
1) As a founder, you need to do what's best for the company. Whatever that is.
2) You're one of the owners. If you didn't have all the skills required for every aspect, at least you showed up and it got done. You can hire in whatever skills you need, including bringing in a CTO who knows more than you did. Maybe you aren't the right person to run the technical side, etc, but don't be muscled out just because someone is better than you are. Frankly you and the CEO need to stick together - if it's that easy to separate you what stops him from being thrown to the curb when there's a better business guy?
About you code. Alot of coders use different naming/formatting so that's an NON issue when it comes to your code. Also your the freakin co-founder... that CTO should have more important things to worry about than if the founder is writing camel-case / low-dash variables or functions. Testing is also optional, I know there are lots of coders that has written tons and tons of really useful code with little testing that works flawlessly. The main reason for using testing is maintainability, but since you are in the early stages of development you will usually end up rewriting your system later anyway, to a better / more secure version.
Call an early board meeting and aim for disciplinary action against the CTO. Founders don't get kicked out by employees. You also need to establish leadership power within the company as a founder vs being pushed around or treated like a code monkey.
Even CEOs can be removed from their high horse should there be collusion here between the CTO and CEO. If you feel this may be the case, seeking some legal advice so you can throw powerful words at those colluding should rattle the bird cake a bit. Just don't bring emotion in.
Founders are key to any company. Roles change. Part of a growing company. Founders keep the fire burning. Any smart investor will tell you the same.
Even CEOs can be removed from their high horse should there be collusion here between the CTO and CEO. If you feel this may be the case, seeking some legal advice so you can throw powerful words at those colluding should rattle the bird cake a bit. Just don't bring emotion in.
Founders are key to any company. Roles change. Part of a growing company. Founders keep the fire burning. Any smart investor will tell you the same.
A lot of advice on lawyering up and fighting this tooth and nail, and gotta say, this is extremely childish and a terrible idea.
If you sue your company, you increase its chance to fail by an order of magnitude. If you lose, you can laugh as your former founders and friends struggle to recover to pre-lawsuit levels but probably fail. If you win you would've won worthless shares in a company that's shortly going to fail.
Be pragmatic. You even admitted yourself that you are not a great coder - be the bigger person and do what it takes to help the company succeed.
Oh and when you exit, negotiate for an automatic vest for 25-50% of your remaining unvested shares.
If you sue your company, you increase its chance to fail by an order of magnitude. If you lose, you can laugh as your former founders and friends struggle to recover to pre-lawsuit levels but probably fail. If you win you would've won worthless shares in a company that's shortly going to fail.
Be pragmatic. You even admitted yourself that you are not a great coder - be the bigger person and do what it takes to help the company succeed.
Oh and when you exit, negotiate for an automatic vest for 25-50% of your remaining unvested shares.
Wow. The lawyering up stuff. It is so depressing that the US works like that. Anyway, as someone who fired himself from his own company twice, I would say that he might have a point. You don't lose your shares (if you do, then arrange that you don't) and he is just making things better. If you are (like I was on occasions) the wrong person for the job, he is just making solid management decisions. The paranoid and lawyer crap could be true but often isn't. So you need to find that out. Sounds like you need to move closer to your co-founder in the business or indeed leave and just enjoy your equity.
This CTO sounds like scum. He may be 100% correct but it's not appropriate for him to suggest you leaving. Your CEO should man up and fire this guy for starting political infighting. Otherwise the CEO will be ousted next.
Why would he ask you to leave unless you were a liability?
It makes no sense as there are so many other positions that become available as a company grows.
Go learn Product. It doesn't take nearly as long, and you can have just as big of a positive impact.
It makes no sense as there are so many other positions that become available as a company grows.
Go learn Product. It doesn't take nearly as long, and you can have just as big of a positive impact.
First question I have. Do you at least have a double trigger in your stock agreement.
New CTO / Wants your out. Some stock option agreements have a double trigger where this can make you vest 100%. Make sure to look over it thoroughly.
New CTO / Wants your out. Some stock option agreements have a double trigger where this can make you vest 100%. Make sure to look over it thoroughly.
Agreeing with everyone here. He has definitely overstepped the line and he is not acting like a true CTO. Part of his job is to ensure he instills a high level of trust and support with the team in addition to the rest of his role. Assuming you're an overall good guy, he should do what he can to ensure you stay as part of the company you helped build, be it bad code or not. And if things are not working out, at least provide the path of what you need to do to make it better as the clause. But either way, it sounds like he's just being an ass with an ego.
Definitely sounds like poor communication between founders.
As an aside, I've been the founding CEO of a company that raised money and was acquired. I think my gifts make me really effective in running a company from idea stage to first revenue. I'm likely not the right person to run that company once there are 1000 employees. I'm fine with that
I don't think there's anything wrong with the exec team asking you to scale back your contributions if your skill set no longer matches the needs of the company. It just sounds like your partners chose a shitty way to go about it.
As an aside, I've been the founding CEO of a company that raised money and was acquired. I think my gifts make me really effective in running a company from idea stage to first revenue. I'm likely not the right person to run that company once there are 1000 employees. I'm fine with that
I don't think there's anything wrong with the exec team asking you to scale back your contributions if your skill set no longer matches the needs of the company. It just sounds like your partners chose a shitty way to go about it.
Being a CTO myself and having worked with smart people that were not as good coders, I think that in your case, the new CTO is just looking for a bad excuse to kick you out. Kicking out somebody who knows the system, product, infrastructure or code base from the beginning is generally a bad idea. Also, the line of professionalism between somebody like you (producing unstructured code without tests etc.) and genious like him is thinner than you think. He's either very arrogant or up to something. In any case, he definitely stepped over the line.
What decision makes you happiest in the rest of your life?
If you measure that by money, go ahead.
Will you be happier staying and contributing? Or happier knowing you got it from first to second gear, and now they will grow what you started?
Practically, a question of ownership and rights comes into play - what does your contract/stock/employment agreement say?
Also pragmatically, since he's asking you to do something after ( after = IF ) you raise more funding, just say sure, let's talk about it then.
No reason to agree to a hypothetical, agree that you will be open minded and review it then.
If you measure that by money, go ahead.
Will you be happier staying and contributing? Or happier knowing you got it from first to second gear, and now they will grow what you started?
Practically, a question of ownership and rights comes into play - what does your contract/stock/employment agreement say?
Also pragmatically, since he's asking you to do something after ( after = IF ) you raise more funding, just say sure, let's talk about it then.
No reason to agree to a hypothetical, agree that you will be open minded and review it then.
Don't shoot the messenger.
Could it be the CEO/the bizguy who wants you to leave? Could he brought up the idea? I can hardly imagine that a hired CTO dares to say something like you wrote without backing.
Could it be the CEO/the bizguy who wants you to leave? Could he brought up the idea? I can hardly imagine that a hired CTO dares to say something like you wrote without backing.
Since he's not asking you to leave the company but instead to stop writing code, is there work to be done elsewhere in the company?
You might find this talk from Ian Hogarth (Songkick) at Hacker News London Meetup quite relevant. He talks about how he would fill a role at Songkick before getting a more specialised person in to fill that role which would see him moving to another completely separate role within the company which needed to be filled.
http://vimeo.com/59187050
You might find this talk from Ian Hogarth (Songkick) at Hacker News London Meetup quite relevant. He talks about how he would fill a role at Songkick before getting a more specialised person in to fill that role which would see him moving to another completely separate role within the company which needed to be filled.
http://vimeo.com/59187050
It is important to deal with this, I would suggest getting a number of people to support you then setting him down because this will only get worse. If you leave you will not get any benefit from the company and your investment will shrink as more investors come on. The only way to keep your investment is to stay in the company (or try to get bought out of the company). You should get him replaced. No matter how good he is, he is trying to ruin your life and that is enough to get rid of him asap.
This may be an unpopular sentiment, but I would do three things:
1) Hire an attorney to make sure your equity is safe 2) Negotiate for an above-market-rate consulting engagement that will continue to pay your bills in return for ~!0 hours a week of consulting and... 3) Start something else.
You have a unique skill set that allows you to start company that go on to raise money, generate revenue, and hire people. This is waaay more valuable than your ability to write code at a growth company.
Just my thoughts.
1) Hire an attorney to make sure your equity is safe 2) Negotiate for an above-market-rate consulting engagement that will continue to pay your bills in return for ~!0 hours a week of consulting and... 3) Start something else.
You have a unique skill set that allows you to start company that go on to raise money, generate revenue, and hire people. This is waaay more valuable than your ability to write code at a growth company.
Just my thoughts.
One of the privileges of being a founder is that employees don't get to tell you when to "leave".
It's your company. Consult an attorney and stand up for yourself.
It's your company. Consult an attorney and stand up for yourself.
Honestly, you need to get some self confidence. You need to man up. Being a nice guy in this scenario doesn't help. If the CTO wants to play dirty and ruthless. You must play dirty and ruthless. How did a guy you hire get the guts to tell you he wants to fire you as a co-founder. This means your other co-founder is probably ganging up with him behind your back. You cannot trust both of them. I don't know who owns more percentage of the company betwen you and your co-founder but I want to believe that your CTO is minority stake holder at this point. Don't leave without a thorough fight. The good thing is that you can code no-matter how terrible, you can build a minimum viable product for any future idea you have. Your CEO cannot which is why it is convenient for him to try and co-operate wit the CTO.
Line of action:
1. Start speaking to a lawyer. 2. Transition out of code writing role into product visionary role, so the CTO doesn't see your as someone that reports to him. You played a part in not just formulating the initial idea but in coding a prototype, so in essence you can play the role of product visionary. That is Chief Product Officer.
3. Tell you co-founder you are transitioning into a product visionary role with the title of Chief Product Officer. Read up what this role does.
4. Call for a meeting with just you and your co-founder and test his allegiance. Tell him that if a guy you hired wants to fire you then he can also team up with future investors to fire the CEO, so he is not save in the future. So due to trust issues, you intend to fire your CTO after you get a replacement. Show him a list of possible top people in the open-source world using your technology that you intend to open up communication with as possible replacement for the CTO. Sink it into his head that the CTO is replace-able and that culture fit matters more thank skills as you can get a replacement for skillset easier than getting the person with the right skillset and cultural fit. http://www.bhorowitz.com/programming_your_culture
5. Call a meeting with your CTO and tell him you plan to stop writing code and then tell him you also plan to get a new CTO to replace him because you can't have a guy you hired steal your company. Let him know he is also replace-able as you won't have hired him because of poor culture fit even though he is skillful if you knew about the schemer he is.
6. Now that you have man up to both, call a meeting with the CEO and CTO to address any issues relating to what you discussed with them.
7. Watch the shares during any round of funding, so you are not squeezed out. See the company incorporation details and ensure your name is there and you are not deceived by your other co-founder.
8. CTO's are replace-able, don't don't let someone you hired ask you to leave, so that he can take your shares. He probably overstated his importance behind your back to the CEO and asked for more shares and your co-founder felt that if he gets you out of the way he will get the more shares.
If they were bold and ruthless, you must be bold and ruthless too.
sate your importance to founding the company, idea generation, writing enough code to make the CTO, join since he knew you people were not idea only guys.
Kick that CTO out and henceforth watch your co-founder closely.
Line of action:
1. Start speaking to a lawyer. 2. Transition out of code writing role into product visionary role, so the CTO doesn't see your as someone that reports to him. You played a part in not just formulating the initial idea but in coding a prototype, so in essence you can play the role of product visionary. That is Chief Product Officer.
3. Tell you co-founder you are transitioning into a product visionary role with the title of Chief Product Officer. Read up what this role does.
4. Call for a meeting with just you and your co-founder and test his allegiance. Tell him that if a guy you hired wants to fire you then he can also team up with future investors to fire the CEO, so he is not save in the future. So due to trust issues, you intend to fire your CTO after you get a replacement. Show him a list of possible top people in the open-source world using your technology that you intend to open up communication with as possible replacement for the CTO. Sink it into his head that the CTO is replace-able and that culture fit matters more thank skills as you can get a replacement for skillset easier than getting the person with the right skillset and cultural fit. http://www.bhorowitz.com/programming_your_culture
5. Call a meeting with your CTO and tell him you plan to stop writing code and then tell him you also plan to get a new CTO to replace him because you can't have a guy you hired steal your company. Let him know he is also replace-able as you won't have hired him because of poor culture fit even though he is skillful if you knew about the schemer he is.
6. Now that you have man up to both, call a meeting with the CEO and CTO to address any issues relating to what you discussed with them.
7. Watch the shares during any round of funding, so you are not squeezed out. See the company incorporation details and ensure your name is there and you are not deceived by your other co-founder.
8. CTO's are replace-able, don't don't let someone you hired ask you to leave, so that he can take your shares. He probably overstated his importance behind your back to the CEO and asked for more shares and your co-founder felt that if he gets you out of the way he will get the more shares.
If they were bold and ruthless, you must be bold and ruthless too.
sate your importance to founding the company, idea generation, writing enough code to make the CTO, join since he knew you people were not idea only guys.
Kick that CTO out and henceforth watch your co-founder closely.
webwright's comments are almost alone in having any real wisdom here, IMO. The nerd brigade of HN (a brigade which I know and love) is failing all over itself.
The truth is that equity in "startups" -- defined as that thing we do where we try to create massive equity value by compounding growth at astounding rates -- is something best held by people who are needed and wanted to work in the company on an ongoing basis.
Any other equity outside of the current exec team -- be it owned by departed founders or by old investors -- is strictly a deadweight loss. (for token amounts to advisors, service providers, partner firms, I would see that differently as its expected their greatest contributions lie ahead)
New money in will see a 50% absentee cofounder (or hell a 25 or even 15%) as rendering the company unfundable. And in any case very "hairy."
This semi-autistic ranting about how OP should lawyer up and tell the others to go to hell is insanely misguided. Most likely if a major shareholder is being eased out and wants to make a huge stink, the result is a dead company.
The sane and grow up thing to do is to talk to the cofounders and figure out who wants what, and if OP really is to leave, he should figure out how to maximize his value subject to a few considerations: 1. The odds he company can survive and thrive (e.g. Attract funding, motivate other execs), 2. The odds that if his deal is too rich he'll just med up inducing a need to engineer a cramdown in a future round, and 3. The reputational cost of being a petulant crazy pants vs being a soldier. Yes, this game is played more than once.
Oh yeah, DO lawyer up, but do so in order to achieve the above.
The truth is that equity in "startups" -- defined as that thing we do where we try to create massive equity value by compounding growth at astounding rates -- is something best held by people who are needed and wanted to work in the company on an ongoing basis.
Any other equity outside of the current exec team -- be it owned by departed founders or by old investors -- is strictly a deadweight loss. (for token amounts to advisors, service providers, partner firms, I would see that differently as its expected their greatest contributions lie ahead)
New money in will see a 50% absentee cofounder (or hell a 25 or even 15%) as rendering the company unfundable. And in any case very "hairy."
This semi-autistic ranting about how OP should lawyer up and tell the others to go to hell is insanely misguided. Most likely if a major shareholder is being eased out and wants to make a huge stink, the result is a dead company.
The sane and grow up thing to do is to talk to the cofounders and figure out who wants what, and if OP really is to leave, he should figure out how to maximize his value subject to a few considerations: 1. The odds he company can survive and thrive (e.g. Attract funding, motivate other execs), 2. The odds that if his deal is too rich he'll just med up inducing a need to engineer a cramdown in a future round, and 3. The reputational cost of being a petulant crazy pants vs being a soldier. Yes, this game is played more than once.
Oh yeah, DO lawyer up, but do so in order to achieve the above.
You should definitely follow the advice of getting a legal counsel and dealing with the issue now as opposed to later.
Also, you should
1. Clear your thoughts around what you want for your company at this point in time, in the near future, and in the long run.
2. Understand what role you envision yourself and your fellow co-founder playing in the above scheme of things.
3. With thoughts around these two areas cleared up, you should sit and talk about this with your co-founder at the earliest.
Also, you should
1. Clear your thoughts around what you want for your company at this point in time, in the near future, and in the long run.
2. Understand what role you envision yourself and your fellow co-founder playing in the above scheme of things.
3. With thoughts around these two areas cleared up, you should sit and talk about this with your co-founder at the earliest.
It's probably up to the board. If they agree with the CTO there is little you can do unless you can get majority shareholders to side with you.
I suppose I'm not clear on the power structure of your company, but to me that seems incredibly insubordinate and I would fire him immediately.
On the other hand, the fact that you're even asking this makes me think you might be too passive of a person to really be in a leadership role. (I don't mean that to be harsh, but you have to be honest with yourself about who you are).
On the other hand, the fact that you're even asking this makes me think you might be too passive of a person to really be in a leadership role. (I don't mean that to be harsh, but you have to be honest with yourself about who you are).
Sounds like this CTO will have more support than you. Time to move on.
Don't understand why everyone is talking lawyers. I'm sure that you have an equity stake which value will be helped by this new CTO. If you have no equity and (as you say) are a founder, then you are out-of-luck and no legal magic can solve this. Move on and leave on good terms. You never know.
Don't understand why everyone is talking lawyers. I'm sure that you have an equity stake which value will be helped by this new CTO. If you have no equity and (as you say) are a founder, then you are out-of-luck and no legal magic can solve this. Move on and leave on good terms. You never know.
Leave. Seriously, walk away. Here are some thoughts:
1. The situation is poisoned. If you stay and force a battle of wills, it will be hugely distracting in a way that adds no value to the company (and remember, building a great company is why you did this in first place), not to mention personally painful for you. That the CEO and CTO have lost confidence in you means it's just going to suck from here on out. Even if you win, that just means disempowering the CTO (or replacement CTO if the current one leaves in frustration, which doesn't seem improbable). Maybe the CTO is wrong, but if he's saddled with someone he doesn't want and can't get rid of because of special cofounder status, it's going to create a pretty shitty working environment for everyone. And if he wins (say, because the CEO votes you out), then that's the same as you sliding out anyway.
2. The CTO definitely hasn't overstepped his boundaries; he's doing his job. He's responsible for running the engineering team and delivering a product. If he thinks you're holding the company back, he'd be being irresponsible not to do something about it. Of course, he could be wrong and there's no way for me (or anyone else here) to determine that. So you have to ask yourself what you really think is best for the company. If it's you leaving, tanking the company in a huge fight (or just dragging it down by sticking around) will just destroy whatever equity you have in it. If it's you staying and you're confident (after putting aside your ego, considering it from other peoples' views, etc), then yeah, convince the CEO and then together fire the CTO for being so terribly wrong. But it's not an issue of boundaries. So: would you hire you?
3. Closely related: what are you doing cofounding companies with that little confidence in yourself? If someone came to you and said, "hey, I haven't coded much and don't have a lot of experience", would you think that was a wise investment? Because you went all in on that investment. Do some work with some guidance and lower stakes and learn your craft. I don't at all mean that as "noob go home" (I have no idea how good you actually are); I mean that your description basically acknowledges you don't think you're the right person for the job of technical cofounder.
4. Your CEO sounds clueless and you should take this opportunity to bail out. If the CTO is wrong about you, the CEO's confidence in him is misplaced and he's also allowing unnecessary complications to destroy his engineering team. If the CTO is right that you don't even belong on the team, then why did the CEO partner with you in the first place? Maybe he thought of you as a temporary pawn to sacrificed at the right time. Maybe he just doesn't know what he's doing. None of those are good. Get out.
5. You say in one of the comments that you don't want to lose your unvested shares and that you've taken on a lot of opportunity cost. The whole point of the vesting is that you get what you've worked for. If you don't think the vested equity you have is commensurate with the work you've done, working more isn't going to fix that. You'll just continue getting screwed, putting in more time and earning the same vesting that you're unhappy with. I know you probably feel pot-committed, but the best thing to do when you have a bad hand is fold your cards and move on.
6. Startups are hard. They're painful work, especially when things go bad, to the point that I wonder why we do it in the best of situations. If you throw in the stress of trying to prove you even belong, it's just shitty. Save your happiness and leave.
7. It's important not to think of these decisions as an affront to your pride. The never-say-die bromide of startup cofounders the world over is mostly bullshit. Make sure you're in a healthy situation with a real chance of success. Quitting isn't shameful, but sabotaging your happiness and the value of your investment because it hurts your ego is very unwise. I don't know whether or not I'd be wise in that situation either--I certainly have plenty of ego--but of course that's why you asked us: we're not involved.
My guess is that once you leave, clear your head, and figure out what you want to do next, you'll look back and say, "wow, I'm glad I got out of that."
1. The situation is poisoned. If you stay and force a battle of wills, it will be hugely distracting in a way that adds no value to the company (and remember, building a great company is why you did this in first place), not to mention personally painful for you. That the CEO and CTO have lost confidence in you means it's just going to suck from here on out. Even if you win, that just means disempowering the CTO (or replacement CTO if the current one leaves in frustration, which doesn't seem improbable). Maybe the CTO is wrong, but if he's saddled with someone he doesn't want and can't get rid of because of special cofounder status, it's going to create a pretty shitty working environment for everyone. And if he wins (say, because the CEO votes you out), then that's the same as you sliding out anyway.
2. The CTO definitely hasn't overstepped his boundaries; he's doing his job. He's responsible for running the engineering team and delivering a product. If he thinks you're holding the company back, he'd be being irresponsible not to do something about it. Of course, he could be wrong and there's no way for me (or anyone else here) to determine that. So you have to ask yourself what you really think is best for the company. If it's you leaving, tanking the company in a huge fight (or just dragging it down by sticking around) will just destroy whatever equity you have in it. If it's you staying and you're confident (after putting aside your ego, considering it from other peoples' views, etc), then yeah, convince the CEO and then together fire the CTO for being so terribly wrong. But it's not an issue of boundaries. So: would you hire you?
3. Closely related: what are you doing cofounding companies with that little confidence in yourself? If someone came to you and said, "hey, I haven't coded much and don't have a lot of experience", would you think that was a wise investment? Because you went all in on that investment. Do some work with some guidance and lower stakes and learn your craft. I don't at all mean that as "noob go home" (I have no idea how good you actually are); I mean that your description basically acknowledges you don't think you're the right person for the job of technical cofounder.
4. Your CEO sounds clueless and you should take this opportunity to bail out. If the CTO is wrong about you, the CEO's confidence in him is misplaced and he's also allowing unnecessary complications to destroy his engineering team. If the CTO is right that you don't even belong on the team, then why did the CEO partner with you in the first place? Maybe he thought of you as a temporary pawn to sacrificed at the right time. Maybe he just doesn't know what he's doing. None of those are good. Get out.
5. You say in one of the comments that you don't want to lose your unvested shares and that you've taken on a lot of opportunity cost. The whole point of the vesting is that you get what you've worked for. If you don't think the vested equity you have is commensurate with the work you've done, working more isn't going to fix that. You'll just continue getting screwed, putting in more time and earning the same vesting that you're unhappy with. I know you probably feel pot-committed, but the best thing to do when you have a bad hand is fold your cards and move on.
6. Startups are hard. They're painful work, especially when things go bad, to the point that I wonder why we do it in the best of situations. If you throw in the stress of trying to prove you even belong, it's just shitty. Save your happiness and leave.
7. It's important not to think of these decisions as an affront to your pride. The never-say-die bromide of startup cofounders the world over is mostly bullshit. Make sure you're in a healthy situation with a real chance of success. Quitting isn't shameful, but sabotaging your happiness and the value of your investment because it hurts your ego is very unwise. I don't know whether or not I'd be wise in that situation either--I certainly have plenty of ego--but of course that's why you asked us: we're not involved.
My guess is that once you leave, clear your head, and figure out what you want to do next, you'll look back and say, "wow, I'm glad I got out of that."
> Leave. Seriously, walk away.*
* With as much equity as possible. From the other comments, it appears you've put in cash to bolster this company. Don't walk away without getting a good share of it. If they think they can succeed with out, don't let them do it without giving you what's rightfully yours.
It's fine to walk away. But don't leave your money on the table.
* With as much equity as possible. From the other comments, it appears you've put in cash to bolster this company. Don't walk away without getting a good share of it. If they think they can succeed with out, don't let them do it without giving you what's rightfully yours.
It's fine to walk away. But don't leave your money on the table.
> The CTO definitely hasn't overstepped his boundaries; he's doing his job. He's responsible for running the engineering team and delivering a product.
Maybe the CTO's request should be interpreted as a request to step back from the engineering team, and focus on other jobs in the company? That's a totally sensible thing to do as the company grows.
Maybe the CTO's request should be interpreted as a request to step back from the engineering team, and focus on other jobs in the company? That's a totally sensible thing to do as the company grows.
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I haven't read all comments so excuse me if this has been mentioned, but you should hand in resignation now with minimum of notice period.
You say that you are currently desperately needed now, so your leverage to work-out an equitable legal arrangement with them will never be greater than now. As you said, in 6 months you may not have any leverage.
Just my $0.02.
You say that you are currently desperately needed now, so your leverage to work-out an equitable legal arrangement with them will never be greater than now. As you said, in 6 months you may not have any leverage.
Just my $0.02.
It takes balls to say to your boss, you are damaging the company. Did you hire a CTO or a yes-man? It's time for you to transition to a new role in the company, not coding hands-on but designing new features.
If you wanted a guy to take care of the details but not the big picture, you would have hired a lead engineer NOT a CTO.
If you wanted a guy to take care of the details but not the big picture, you would have hired a lead engineer NOT a CTO.
Are you and your partner equal partners? Can you do more stuff on the biz side? product management/dev side? He's prob right, you shouldnt be coding enterprise level delivery with hackery crappy code. Be of service elsewhere or it will be a pain in the ass.
Tough situation, sorry to hear about it. The comments in the thread are very informative. As I read each comment I'm thinking to myself "is this commenter an engineer / founder / vc / etc" and finding that to be an interesting exercise.
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Does the code you write reduce the costs or increase revenue of the business? Get those numbers together and compare them to the rest of development. If they compare favorably, share them with the CTO. If not, find a way to increase them.
Founder shuffling is not uncommon. Founders aren't always (or even often) great managers, leaders, or recruiters-- which is what you need to transition into if you're going to stay with the company. I'd encourage you to try to put yourself in their shoes. It doesn't feel fair for you, but if a co-founder who owned a huge vesting stake in the company didn't grow/perform like you'd hoped, would you want to negotiate their exit? Or would you keep them on out of loyalty, knowing that it hurt the company's recruiting efforts, culture, and chances of success?
It sounds like you've raised money, have a business co-founder, and have some other employees. All of those people are (rightfully) should be asking what's best for the company. Hopefully you are too. If the stock you're vesting (hopefully you have vesting schedule!) is outsized compared to the value you bring to the company, you need to fix the problem.
I'd ask your co-founder for their thoughts and (potentially) I'd ask your investors. Unless the CTO is going rogue, he's probably already got support on both of these fronts, which means you can't really do much other than make a scene and/or sue if they want to show you the door, which will damage your company, your stock in it, and your soul. No fun.
Assuming your co-founder agrees with the CTO (likely), options:
1) Say you love the company, don't want to leave, but acknowledge there is a problem with your compensation/value ratio. Negotiate to an agreeable role and pile of stock with the caveat that if you can prove yourself invaluable, you'd like to be able to come back to the table. If they push back, saying you aren't good enough, ask for a 3-6 month trial period to prove your mettle. Bust ass and become indispensable.
2) Leave gracefully, with a negotiated severance/stock package (know that they can dilute you and there are ways they can wipe you out at inopportune times: http://www.geekwire.com/2014/redfins-first-cto-shocked-surpr... )... But unless they are bad actors, you'll get a nice payday if there's even liquidity.
3) Pitch a fit. You'll lose this fight unless you guys botched the company setup or you have allies among the investors. This will hurt the company a lot and it's a bad path.
Good luck and (above all) congratulations for being instrumental in creating a viable company!
It sounds like you've raised money, have a business co-founder, and have some other employees. All of those people are (rightfully) should be asking what's best for the company. Hopefully you are too. If the stock you're vesting (hopefully you have vesting schedule!) is outsized compared to the value you bring to the company, you need to fix the problem.
I'd ask your co-founder for their thoughts and (potentially) I'd ask your investors. Unless the CTO is going rogue, he's probably already got support on both of these fronts, which means you can't really do much other than make a scene and/or sue if they want to show you the door, which will damage your company, your stock in it, and your soul. No fun.
Assuming your co-founder agrees with the CTO (likely), options:
1) Say you love the company, don't want to leave, but acknowledge there is a problem with your compensation/value ratio. Negotiate to an agreeable role and pile of stock with the caveat that if you can prove yourself invaluable, you'd like to be able to come back to the table. If they push back, saying you aren't good enough, ask for a 3-6 month trial period to prove your mettle. Bust ass and become indispensable.
2) Leave gracefully, with a negotiated severance/stock package (know that they can dilute you and there are ways they can wipe you out at inopportune times: http://www.geekwire.com/2014/redfins-first-cto-shocked-surpr... )... But unless they are bad actors, you'll get a nice payday if there's even liquidity.
3) Pitch a fit. You'll lose this fight unless you guys botched the company setup or you have allies among the investors. This will hurt the company a lot and it's a bad path.
Good luck and (above all) congratulations for being instrumental in creating a viable company!
This is a tough situation. I have what I think are some relevant recent experiences, but I've signed some agreements and can't just post on the internet. e-mail me at jackphelps at gmail dot com if you want to talk.
You hired the right guy, he's technically better than you Congrats!
So the second part is basically you getting a new job in the company. If there really is no place for you (which I would doubt) then you still keep some equity and go on.
So the second part is basically you getting a new job in the company. If there really is no place for you (which I would doubt) then you still keep some equity and go on.
He does have a point.
It's not common because usually higher-ups always remind people who's in charge.
It's up to you, but if you decide to stay you need to be more affirmative and build self-esteem.
IMO, there is no point you try to improve your coding skill at this point of time. As a co-founder, you should try to improve on management skills, try to find replacement of your CTO and then fire him
As mentioned I would have a lawyer review your contracts thoroughly. When money starts coming in the door, the game changes completely. Situations can be brutal, don't be one of the sad stories.
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Throwaway here.
I too (like Bluestrike2) was squeezed out of the company I co-founded. I know what it’s like. And I want to help.
In my situation, I didn't get 3-6 months notice.
There was a "difference of opinion" about the value of work I was putting into the business, and a "difference of opinion" about where the business should go strategically, and one Tuesday morning I entered a grim meeting where I was given an exit contract to consider.
It was a bit of a shock - and they kindly offered me a few days to think about it, letting me go home to cry.
How very kind of them...
...I realised the next day that it was to get me out of the building without incident - and that they'd already begun changing passwords (including my work email password) in the meeting, and continued the rest of the day.
How humiliating…
The situation you’re in sucks.
For what it's worth (and I say this sincerely), I'm so fucking sorry.
They're assholes. You don't deserve this. And the company never would have got to where it is today without your contribution - and how dare they use the foundation you built (your baby) to screw you.
Then they have the gall to act as if you’re "not good enough".
Fuck them.
You’re awesome. You’ve done some cool shit. And - as great as the project is you’re working on now - I would sincerely hope that it wasn’t going to be the crowning achievement of your lifetime. I’m absolutely certain that the best for you is yet to come.
I could tell you how good things are going to be in the future, and you probably wouldn't believe me.
I could tell you that the lessons you learn now about control, shareholdership, business politics and more will save you later when friends and colleagues are learning the lessons themselves.
But both of these are cold comfort.
Realistically things are going to get harder for a while (finances, life direction, self confidence, etc), but in a few years as these things get back on track you'll know yourself better, be doing something you love more, and will be much wiser as a result of what you're doing right now.
Now... Let's focus on the next few weeks.
Firstly, ignore the posturing and politics in this thread about whether or not the CTO overstepped his bounds. Realistically, if he has the CEO on-side, it doesn’t matter.
Feel free to get up on your high horse about this if you need to, or if it makes you feel better. Or you could wear funny hats. Or do something else equally useless.
When you’re ready to do something productive, let’s keep going.
I too (like Bluestrike2) was squeezed out of the company I co-founded. I know what it’s like. And I want to help.
In my situation, I didn't get 3-6 months notice.
There was a "difference of opinion" about the value of work I was putting into the business, and a "difference of opinion" about where the business should go strategically, and one Tuesday morning I entered a grim meeting where I was given an exit contract to consider.
It was a bit of a shock - and they kindly offered me a few days to think about it, letting me go home to cry.
How very kind of them...
...I realised the next day that it was to get me out of the building without incident - and that they'd already begun changing passwords (including my work email password) in the meeting, and continued the rest of the day.
How humiliating…
The situation you’re in sucks.
For what it's worth (and I say this sincerely), I'm so fucking sorry.
They're assholes. You don't deserve this. And the company never would have got to where it is today without your contribution - and how dare they use the foundation you built (your baby) to screw you.
Then they have the gall to act as if you’re "not good enough".
Fuck them.
You’re awesome. You’ve done some cool shit. And - as great as the project is you’re working on now - I would sincerely hope that it wasn’t going to be the crowning achievement of your lifetime. I’m absolutely certain that the best for you is yet to come.
I could tell you how good things are going to be in the future, and you probably wouldn't believe me.
I could tell you that the lessons you learn now about control, shareholdership, business politics and more will save you later when friends and colleagues are learning the lessons themselves.
But both of these are cold comfort.
Realistically things are going to get harder for a while (finances, life direction, self confidence, etc), but in a few years as these things get back on track you'll know yourself better, be doing something you love more, and will be much wiser as a result of what you're doing right now.
Now... Let's focus on the next few weeks.
Firstly, ignore the posturing and politics in this thread about whether or not the CTO overstepped his bounds. Realistically, if he has the CEO on-side, it doesn’t matter.
Feel free to get up on your high horse about this if you need to, or if it makes you feel better. Or you could wear funny hats. Or do something else equally useless.
When you’re ready to do something productive, let’s keep going.
What I'm going to tell you next is controversial. Take it or leave it. I'm sure other people will tell you it's wrong/immoral/stupid/a bad idea/whatever... Good for them.
I want you to start saving everything.
Save emails. Save contacts and contRacts. Save code libraries. Save workplace procedures and systems. Save lists of your clients, suppliers and resellers. Save strategy documents. Save analytics and marketing plans. Save Facebook remarketing lists.
Then put all of this stuff in a drawer, and forget about it for the next few years.
One day down the track, you're going to wish you had access to some of this stuff.
"What was that supplier/investor/advisor's phone number?", "How did we build our user base initially?", "How successful was X technique?", "What was the codebase we used?", "Who was that great client who gave us helpful feedback?" etc.
Keep it offsite, and do it in a way that won't set off alarm bells (slowly, reasonably, etc). Be very very careful. This is probably their #1 fear, and they might be keeping tabs on access logs for certain sensitive documents.
No doubt a lot of this data will be stored on your computer (laptop?) already. Back it up, and keep a backup offsite so that it's protected if you get a rude shock and are forced out at a moments notice.
The other way to access it is in the normal course of work over the next few months. If you have a legitimate reason to check X while you're doing Y, then check X on your local machine and save a backup. Over 3-6 months, you'll probably end up touching every piece of the business.
This is not about power. It's not about revenge. And it's not copyright or IP rights. (Don't be stupid and try to use it to "get them back", or to beat them at their own game, or ruin them, or whatever. You'll lose.)
This is a reference for you. A time capsule you can look back on for lessons, advice and strategy when you're building the foundation of your new life - without having to go back to square one.
I want you to start saving everything.
Save emails. Save contacts and contRacts. Save code libraries. Save workplace procedures and systems. Save lists of your clients, suppliers and resellers. Save strategy documents. Save analytics and marketing plans. Save Facebook remarketing lists.
Then put all of this stuff in a drawer, and forget about it for the next few years.
One day down the track, you're going to wish you had access to some of this stuff.
"What was that supplier/investor/advisor's phone number?", "How did we build our user base initially?", "How successful was X technique?", "What was the codebase we used?", "Who was that great client who gave us helpful feedback?" etc.
Keep it offsite, and do it in a way that won't set off alarm bells (slowly, reasonably, etc). Be very very careful. This is probably their #1 fear, and they might be keeping tabs on access logs for certain sensitive documents.
No doubt a lot of this data will be stored on your computer (laptop?) already. Back it up, and keep a backup offsite so that it's protected if you get a rude shock and are forced out at a moments notice.
The other way to access it is in the normal course of work over the next few months. If you have a legitimate reason to check X while you're doing Y, then check X on your local machine and save a backup. Over 3-6 months, you'll probably end up touching every piece of the business.
This is not about power. It's not about revenge. And it's not copyright or IP rights. (Don't be stupid and try to use it to "get them back", or to beat them at their own game, or ruin them, or whatever. You'll lose.)
This is a reference for you. A time capsule you can look back on for lessons, advice and strategy when you're building the foundation of your new life - without having to go back to square one.
So if you're saying that they need you for another 3-6 months, then it might be worth pushing forward exit talks now - before you become useless and unnecessary in the business, and while they need you.
Your lawyer will be able to advise you on strategy here, and if they're cool-headed, it might be best to get them to negotiate on your behalf. (I know personally, one harsh comment or unfair criticism and I'd lose my focus in negotiations, or break down and be unable to cope. So having an experienced advocate might be worthwhile.)
How I would be playing this would be:
a) I'd explore a scenario where I stayed on in a non-tech role, without losing the equity vested.
b) I'd explore whether I could (kindly) stay on for the 3-6 months they needed in return to receiving a payout for the equity vested at an agreed amount that saw me take back the personal wealth plus an agreed amount of money for the vested equity. (This is going to hurt, and you'll feel like they paid too little while they feel they paid too much, but I don't think you should tie your equity to something illiquid that you have no control over.)
c) I'd explore plan b, paid out over instalments instead of in one lump sump, if they don't have the capacity to pay right now.
d) I'd explore plan b as a mix of equity plus cash - maximising cash.
e) I'd explore plan b, but instead of a payout I'd look to increase the vested equity in the company to an agreed amount. (If they can't get the money to pay out out now, this might be the only option - but I think it's messy and risky.)
f) If you can't get any of those, just do whatever you can to walk away with as much of the capital you've invested as you can - ideally in cash.
How did things work out for me?
I ended up with a Plan C. It worked out to be the equivalent of about 1.5 years dividends from my shareholding as we were structured differently, was already profitable and industry-leading in what it was doing. I thought I got screwed. My co-founders thought they paid too much. Whatever. All divorces are acrimonious.
Fast forward a few years, and I have a new company that makes me more money, sees me working 10-20 hours a week, and doing something I enjoy doing far more.
What's happened to my co-founders? Well, the business reached saturation point soon after I left, and is now struggling to survive. After we finally forgave each other, I caught up with my now greying, stressed, sick, tired, overworked and underpaid cofounder/former best friend and I feel sorry for him. He actually looks at my life now and envies it. :(
What happened to me at the time left me teetering on the edge of suicide. It was humiliating. It was a huge fall from grace. And I felt utterly destroyed: financially, emotionally, spiritually, and physically.
It took me 18 months to recover, 2.5 years to regain a level of confidence in who I am and what I do, and 3 years to build my new business, and 4 years to stop regretting what happened and feel happier about where I'm going than where I've been.
You sound like a smart guy - and I'm confident that your new life will be far better than the hell or uncertainty you're in right now (or the hell you may be in for another 3-6+ months).
My wish for you is that you get to leave your current situation with the best possible foundation (whatever it looks like) and you begin your new life as soon as possible.
If your future isn't in this venture, then the sooner you get started on "the next thing", the sooner you'll get there.
Your lawyer will be able to advise you on strategy here, and if they're cool-headed, it might be best to get them to negotiate on your behalf. (I know personally, one harsh comment or unfair criticism and I'd lose my focus in negotiations, or break down and be unable to cope. So having an experienced advocate might be worthwhile.)
How I would be playing this would be:
a) I'd explore a scenario where I stayed on in a non-tech role, without losing the equity vested.
b) I'd explore whether I could (kindly) stay on for the 3-6 months they needed in return to receiving a payout for the equity vested at an agreed amount that saw me take back the personal wealth plus an agreed amount of money for the vested equity. (This is going to hurt, and you'll feel like they paid too little while they feel they paid too much, but I don't think you should tie your equity to something illiquid that you have no control over.)
c) I'd explore plan b, paid out over instalments instead of in one lump sump, if they don't have the capacity to pay right now.
d) I'd explore plan b as a mix of equity plus cash - maximising cash.
e) I'd explore plan b, but instead of a payout I'd look to increase the vested equity in the company to an agreed amount. (If they can't get the money to pay out out now, this might be the only option - but I think it's messy and risky.)
f) If you can't get any of those, just do whatever you can to walk away with as much of the capital you've invested as you can - ideally in cash.
How did things work out for me?
I ended up with a Plan C. It worked out to be the equivalent of about 1.5 years dividends from my shareholding as we were structured differently, was already profitable and industry-leading in what it was doing. I thought I got screwed. My co-founders thought they paid too much. Whatever. All divorces are acrimonious.
Fast forward a few years, and I have a new company that makes me more money, sees me working 10-20 hours a week, and doing something I enjoy doing far more.
What's happened to my co-founders? Well, the business reached saturation point soon after I left, and is now struggling to survive. After we finally forgave each other, I caught up with my now greying, stressed, sick, tired, overworked and underpaid cofounder/former best friend and I feel sorry for him. He actually looks at my life now and envies it. :(
What happened to me at the time left me teetering on the edge of suicide. It was humiliating. It was a huge fall from grace. And I felt utterly destroyed: financially, emotionally, spiritually, and physically.
It took me 18 months to recover, 2.5 years to regain a level of confidence in who I am and what I do, and 3 years to build my new business, and 4 years to stop regretting what happened and feel happier about where I'm going than where I've been.
You sound like a smart guy - and I'm confident that your new life will be far better than the hell or uncertainty you're in right now (or the hell you may be in for another 3-6+ months).
My wish for you is that you get to leave your current situation with the best possible foundation (whatever it looks like) and you begin your new life as soon as possible.
If your future isn't in this venture, then the sooner you get started on "the next thing", the sooner you'll get there.
Now that we have that out of the way - let's talk lawyers.
Realistically, if you don't have a controlling stake, they're next-to-nothing you can do to stop "them" screwing you. All a lawyer is going to be able to do is tell you "if you do X, or let them do Y, you'll be far worse off".
As Bluestrike2 says, you might wind up winning the case, but bankrupting yourself in the process. Litigators are the only profession that provides no economic benefit to society. Other professions create things, or improve things, or build on things. Litigators divide a pie into 3 parts, and keep a slice. So the chances of walking out ahead are pretty remote.
Plus it sounds like you don't have a huge amount of cash to spend on lawyers anyway.
So keep your head screwed on. Sure, get advice so that you know where you stand. But this "lawyer up", "fight for your rights" bullshit is a road to ruin spouted by idiots.
Find a lawyer who has expertise working for people in your CTO/CEO's position. I think they're going to have seen more cases, and learned more about what works and what doesn't, than someone who has expertise protecting "the little guy" (minority shareholders, etc).
I don't know what it's like where you are, but where I'm from lawyers are required to provide a schedule of fees and a costs estimate upon request. It's nice to get an idea about the fees in advance.
Before you meet with them, send them the contract and have a brief chat about what you want from them before you sit down. The day before you meet with them, call them just to check they've read the contract. Don't let them get away with flying by the seat of their pants in your consultation. (You'd be surprised at how many lawyers do this.)
The 3 questions you want answered are:
1. What your legal obligations are, under your contract and any relevant legislation or case law, and how do you ensure you don't fuck up and accidentally screw yourself out of your equity/shareholding/vesting/whatever.
2. What legal protections you have under your contract and any relevant legislation or case law. (i.e. How might the company push you out in unpleasant ways, and what you can do to prevent this from happening.)
3. How would they recommend you get out as quickly and as profitably as possible.
Realistically, your lawyer is going to tell you "Here's a list of stupid and pretty obvious things you shouldn't do. There's not too much you can do to protect yourself, and there are plenty of things they can do to screw you totally."
For example, the CEO might be in a position where they could sell all the assets of the company to a new company, and leave you with an interest in an empty shell. Or there might be an "out" in the contract that lets them essentially kick you out for next-to-nothing. Or the CEO could "loan" the company money at high interest rates, bankrupting it, and then repossess the assets. And there might be sweet FA you can do to protect yourself from these scenarios.
Realistically, if you don't have a controlling stake, they're next-to-nothing you can do to stop "them" screwing you. All a lawyer is going to be able to do is tell you "if you do X, or let them do Y, you'll be far worse off".
As Bluestrike2 says, you might wind up winning the case, but bankrupting yourself in the process. Litigators are the only profession that provides no economic benefit to society. Other professions create things, or improve things, or build on things. Litigators divide a pie into 3 parts, and keep a slice. So the chances of walking out ahead are pretty remote.
Plus it sounds like you don't have a huge amount of cash to spend on lawyers anyway.
So keep your head screwed on. Sure, get advice so that you know where you stand. But this "lawyer up", "fight for your rights" bullshit is a road to ruin spouted by idiots.
Find a lawyer who has expertise working for people in your CTO/CEO's position. I think they're going to have seen more cases, and learned more about what works and what doesn't, than someone who has expertise protecting "the little guy" (minority shareholders, etc).
I don't know what it's like where you are, but where I'm from lawyers are required to provide a schedule of fees and a costs estimate upon request. It's nice to get an idea about the fees in advance.
Before you meet with them, send them the contract and have a brief chat about what you want from them before you sit down. The day before you meet with them, call them just to check they've read the contract. Don't let them get away with flying by the seat of their pants in your consultation. (You'd be surprised at how many lawyers do this.)
The 3 questions you want answered are:
1. What your legal obligations are, under your contract and any relevant legislation or case law, and how do you ensure you don't fuck up and accidentally screw yourself out of your equity/shareholding/vesting/whatever.
2. What legal protections you have under your contract and any relevant legislation or case law. (i.e. How might the company push you out in unpleasant ways, and what you can do to prevent this from happening.)
3. How would they recommend you get out as quickly and as profitably as possible.
Realistically, your lawyer is going to tell you "Here's a list of stupid and pretty obvious things you shouldn't do. There's not too much you can do to protect yourself, and there are plenty of things they can do to screw you totally."
For example, the CEO might be in a position where they could sell all the assets of the company to a new company, and leave you with an interest in an empty shell. Or there might be an "out" in the contract that lets them essentially kick you out for next-to-nothing. Or the CEO could "loan" the company money at high interest rates, bankrupting it, and then repossess the assets. And there might be sweet FA you can do to protect yourself from these scenarios.
[deleted]
Founders need to find more ways to be useful.
If you have the hustle, get going on sales and biz dev.
Because all the coding talent in the world doesn't matter if customers aren't buying or don't know about your app.
If you have the hustle, get going on sales and biz dev.
Because all the coding talent in the world doesn't matter if customers aren't buying or don't know about your app.
[deleted](1)
Hire an attorney, and leave with all the shitload of money you can grab from these (not thankful) guys. What the other cofounder says about this situation?
[deleted]
is it possible that you stop writing code for few months, revisit your programming skill and meanwhile remain active on administration level ???
If you think ur coding is not good, then there is always a chance to improve.
And leaving the company is out of question. You have founded it. So you MUST be there because every story dont end like Steve Job's firing from Apple.
He's throwing you out & fucking you over. If you're a founder you stay a founder unless you did something horribly bad.
Fire the CTO, asap!
Do not underestimate yourself, you can code and be very helpful to the company. You definitely do not need that type of CTO at this point.
Comments like "your code is not good enough" are completely subjective and if anything show malicious intent to cut you off.
I would talk to a lawyer in terms of what is the best way to do it though, such as you can maintain your equity and influence in the company.
DO NOT let that a-hole take advantage of your hard work and dedication you have put in your OWN company!
Do not underestimate yourself, you can code and be very helpful to the company. You definitely do not need that type of CTO at this point.
Comments like "your code is not good enough" are completely subjective and if anything show malicious intent to cut you off.
I would talk to a lawyer in terms of what is the best way to do it though, such as you can maintain your equity and influence in the company.
DO NOT let that a-hole take advantage of your hard work and dedication you have put in your OWN company!
Are there any of: a legal entity, employment agreements, IP agreements, participation agreements?
He works for you. Tell him to go fuck himself. He's way overstepped his boundaries.
It sounds like you're a good coder . . . because you care. Just saying'
Make sure you've seen 'Startup.com' (documentary) and 'The Social Network' (useful for the archetypes even with the fictions). If you do wind up as an early founder out, try to be more like the guy in Startup.com, or Jawed Karim (YouTube), rather than Ron Wayne (Apple).
dude, you are the founder, he is an employee. You presumably have a lot more control over what happens at the company than he does. If you aren't a great coder, keep learning.
[deleted]
Doesn't he work for you? You are a founder, after all.
If you feel that you've been used, you're right. Here's how you know:
1) did your co-founder grasp your skill level when you were both starting the firm? I 100% suspect you were forthright and yet your cofounder/ceo ran with you.
2) I'm sorry to break it to you, but you probably already suspect. For reference, read how Larry Ellison pushed out every one of his cofounders of Oracle in order to get the pie. Zuckerberg: did the same thing. Bill Gates and Ballmer pushed out Paul Allen in the early days of Microsoft. Yet Allen and some of Zuckerberg's 'pressured-out' victims still got paid. You need to get paid to. You got the firm to the point it's at -- your intellect, your creativity, your hard work.
3) You've already agreed to the supposition "the CEO (your co-founder) has quite a bit of confidence in the CTO." Why is the CEO unwilling to do the right thing about you and say 'he stays, he was here first, he laid the groundwork, we got where we are because of him and me together, he stays.' That is not a good sign that your cofounder is not backing you up.
4) My older brother was in your situation, part of the original ownership of the firm, they hired a pro outsider to take the reigns to scale it. That outsider's first objective was to bring in his people and he got my brother fired. The reliable cofounders then fired the outsider. Just as in your situation, my brother had invested in the firm. You may not have a reliable co-founder. OR. The CTO is playing 'divide and conquer.' Try to figure out which is the case. If the CEO/your cofounder hedges, you can't trust him.
5) Some companies keep on cofounders even if they're 100% green about business issues. At first, Sergey and Larry (google) did not want any advertising at all. Advertising made google. Larry and Sergey were too dumb about that part. They got talked into it by pro outsiders. Then Larry waited many years but he finally runs Google. He was a grad student with zero business acumen. But they remained loyal and gave him time to learn business strategy, develop business acumen, etc. Neither Larry nor Sergey got pressured out, and if the investors tried 'divide and conquer' to steal the entire business, they underestimated Sergey and Larry's commitment to each other.
You're probably being 'pushed out' and you may be in for quite a battle -- go see an attorney and tell him what's up and do not sign anything in your startup.
Your minimal objective is 100% vesting of all your equity. If your investors get paid, then you -- most likely owner of common shares, not preferred shares -- might also get paid. But if you allow yourself to be pushed out, you've kissed away a chance at some common shares enrichment -- in a company you started. That's a huge deal. Maybe once in a lifetime. Maybe.
1) did your co-founder grasp your skill level when you were both starting the firm? I 100% suspect you were forthright and yet your cofounder/ceo ran with you.
2) I'm sorry to break it to you, but you probably already suspect. For reference, read how Larry Ellison pushed out every one of his cofounders of Oracle in order to get the pie. Zuckerberg: did the same thing. Bill Gates and Ballmer pushed out Paul Allen in the early days of Microsoft. Yet Allen and some of Zuckerberg's 'pressured-out' victims still got paid. You need to get paid to. You got the firm to the point it's at -- your intellect, your creativity, your hard work.
3) You've already agreed to the supposition "the CEO (your co-founder) has quite a bit of confidence in the CTO." Why is the CEO unwilling to do the right thing about you and say 'he stays, he was here first, he laid the groundwork, we got where we are because of him and me together, he stays.' That is not a good sign that your cofounder is not backing you up.
4) My older brother was in your situation, part of the original ownership of the firm, they hired a pro outsider to take the reigns to scale it. That outsider's first objective was to bring in his people and he got my brother fired. The reliable cofounders then fired the outsider. Just as in your situation, my brother had invested in the firm. You may not have a reliable co-founder. OR. The CTO is playing 'divide and conquer.' Try to figure out which is the case. If the CEO/your cofounder hedges, you can't trust him.
5) Some companies keep on cofounders even if they're 100% green about business issues. At first, Sergey and Larry (google) did not want any advertising at all. Advertising made google. Larry and Sergey were too dumb about that part. They got talked into it by pro outsiders. Then Larry waited many years but he finally runs Google. He was a grad student with zero business acumen. But they remained loyal and gave him time to learn business strategy, develop business acumen, etc. Neither Larry nor Sergey got pressured out, and if the investors tried 'divide and conquer' to steal the entire business, they underestimated Sergey and Larry's commitment to each other.
You're probably being 'pushed out' and you may be in for quite a battle -- go see an attorney and tell him what's up and do not sign anything in your startup.
Your minimal objective is 100% vesting of all your equity. If your investors get paid, then you -- most likely owner of common shares, not preferred shares -- might also get paid. But if you allow yourself to be pushed out, you've kissed away a chance at some common shares enrichment -- in a company you started. That's a huge deal. Maybe once in a lifetime. Maybe.
Stop coding.
Secure your equity.
Get a lawyer.
Fire the CTO.
In that order.
Secure your equity.
Get a lawyer.
Fire the CTO.
In that order.
Have you read Kafka's The Trial?
He has NO point. He has no right to mouth you off like this. Take a cue from The Social Network.
[leans down close to Mark, his voice low and dangerous]
And I'll bet what you hated the most was that they
identified me as a co-founder of Facebook, which I am.
You better lawyer up asshole, because I'm not coming
back for 30%, I'm coming back for EVERYTHING.
[backs away from Mark slowly, still looking at him]
I think The Social Network is a bad example. I don't know what happened in real life, but in the movie the guy was never there. I wouldn't want an absentee co-founder to have 30% of my company (or even 5% for that matter) either if I was working on it full time.
Try and find out if the CTO is the only problem, ie. he's not conspiring with the other founder.
If the CTO is acting alone, get rid of him and continue with the business. If not, ruin their fundraising chances, cut your losses and move on to bootstrap a business on your own.
A prolonged fight won't do you any good.
If the CTO is acting alone, get rid of him and continue with the business. If not, ruin their fundraising chances, cut your losses and move on to bootstrap a business on your own.
A prolonged fight won't do you any good.
there's plenty of other good tactical advice here, but i would like to say something more general:
this is the point in your life where you decide to be a lion, or a lamb. the hyenas are circling and they're not going away.
this is the point in your life where you decide to be a lion, or a lamb. the hyenas are circling and they're not going away.
That reminds me of when I was in bootcamp. Our DIs would constantly ask us "Are you a mouse or a man?"
[deleted]
We brought in a guy as CTO to help us move past problems we were having (feature creep, project management, enterprise level etc.).
The guy has a lot of experience as CTO (I had very little, also little as a coder), and he was instrumental in getting us to the point of launch where we were enterprise grade ready (as opposed to hacker ready).
Now he is advising me to leave, that I'm not a good coder, that he wouldn't hire me if I wasn't already a founder and not what the company needs.
I have improved significantly in the last few months from where I was (generally unstructured development, no tests, poor formatting / naming etc., but functional, generally coding to working with others instead of by myself) but he has said that it's not enough.
We have hired another coder who I get along well with and I have learned from.
My question is, does he have a point? Is this something that is common? Has he overstepped the boundaries?
EDIT: He's not asking me to leave now, since I'm still desperately needed, but in 3-6 months time after we have raised more funding.