VCs have a habit of replacing founders with their own handpicked CEOs. And they like to do it over lunch, according The Great Startup Game blogger Peter Ireland. Here's how it works: They'll get the founder a little lit and then explain that the startup has this great chance to bring a game-changing "star" onto its board. Founders typically cave. And of course the new board member goes on to become the vote needed to fire the founder. Oops. Here's how not to cave.
First off, don't be a wimp, Ireland says. "To do so only reinforces the venture capitalist's belief that he was right about replacing you." Negotiate. Tell the VC you "can't recommend someone for a board seat until you are satisfied that they can make an actual contribution." Or, say that the board is fine, but you'd be happy to bring this "star" on as a consultant. If those tactics fail? Call your lawyer. Not your company's laywer, Ireland says. Yours.
(Photo by Marshall Astor - Food Pornographer)
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