Nice counterpoints, but I think #2 isn't quite the whole story.
Economically it makes sense for an investor to minimize expenditures. If the founders are willing to work for peanuts, then it's the investors prerogative to keep them that way. No foul there.
However for any VC to ever utter the words "just the founder" in the founder's presence is a massive managerial fail. Founders are not the people who you want to "put in their place", they are the ones who make the company succeed. Even if you think you don't need them anymore, why would so blithely burn a connection with a talented entrepreneur?
Economically it makes sense for an investor to minimize expenditures. If the founders are willing to work for peanuts, then it's the investors prerogative to keep them that way. No foul there.
We agree.
However for any VC to ever utter the words "just the founder" in the founder's presence is a massive managerial fail.
So this VC is guilty of "What You Can't Say?" I'd rather have a VC look me in the eye and tell me the deal than have a VC tell me how wonderful I am but there just isn't enough cash in the kitty to feed my family after paying for the new CEO.
If the VC ends up paying the CEO to eat Sushi while I eat Ramen, I don't care how I'm spoken to, there's a deal there I have to take or leave.
If the VC ends up paying the CEO to eat Sushi while I eat Ramen, I don't care how I'm spoken to, there's a deal there I have to take or leave.
It's unwise for a VC (or anyone) to assume the person they are talking to is this objective.
Calling the founder "just a founder" is a recipe for resentment, and it's totally unnecessary. There are about a million ways to tell the founder that they can't get paid the same amount as the CEO, and this is pretty close to the most potentially damaging way I can think of.
Ignoring that this apparently came after the VC's investment, I too would prefer that a VC tell me "the deal" that he has neither respect nor appreciation of me and the others who brought the company to the point where he can help.
It's not about money per se, it's about the signal this sends. Like the previously discussed archetypal new CFO who shows who's who and what's what by terminating free soda.
Comments
Nice counterpoints, but I think #2 isn't quite the whole story.
Economically it makes sense for an investor to minimize expenditures. If the founders are willing to work for peanuts, then it's the investors prerogative to keep them that way. No foul there.
However for any VC to ever utter the words "just the founder" in the founder's presence is a massive managerial fail. Founders are not the people who you want to "put in their place", they are the ones who make the company succeed. Even if you think you don't need them anymore, why would so blithely burn a connection with a talented entrepreneur?
Economically it makes sense for an investor to minimize expenditures. If the founders are willing to work for peanuts, then it's the investors prerogative to keep them that way. No foul there.
We agree.
However for any VC to ever utter the words "just the founder" in the founder's presence is a massive managerial fail.
So this VC is guilty of "What You Can't Say?" I'd rather have a VC look me in the eye and tell me the deal than have a VC tell me how wonderful I am but there just isn't enough cash in the kitty to feed my family after paying for the new CEO.
If the VC ends up paying the CEO to eat Sushi while I eat Ramen, I don't care how I'm spoken to, there's a deal there I have to take or leave.
If the VC ends up paying the CEO to eat Sushi while I eat Ramen, I don't care how I'm spoken to, there's a deal there I have to take or leave.
It's unwise for a VC (or anyone) to assume the person they are talking to is this objective.
Calling the founder "just a founder" is a recipe for resentment, and it's totally unnecessary. There are about a million ways to tell the founder that they can't get paid the same amount as the CEO, and this is pretty close to the most potentially damaging way I can think of.
> It's unwise for a VC (or anyone) to assume the person they are talking to is this objective.
I never said I was objective: It's really a question of which circumstance I dislike the least. :-)
Fair enough, I just thought you were talking past my main point...
Ignoring that this apparently came after the VC's investment, I too would prefer that a VC tell me "the deal" that he has neither respect nor appreciation of me and the others who brought the company to the point where he can help.
It's not about money per se, it's about the signal this sends. Like the previously discussed archetypal new CFO who shows who's who and what's what by terminating free soda.