Comments on: Should Founders Be Allowed to Take Money off the Table? http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/ Entrepreneur turned VC Mon, 14 Nov 2011 23:37:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Peter Gallant http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-21561 Peter Gallant Fri, 17 Dec 2010 20:24:27 +0000 http://www.bothsidesofthetable.com/?p=824#comment-21561 Mark:<br><br>A very insightful post! I have experienced firsthand what happens when the interests of the entrepreneur (me) and the investors (angels and venture funds) are not aligned. I do believe that at least some proportion of the responsibility rests with the entrepreneur during the search for cash when they should be doing their own due diligence on their prospective investor partners. All of us who have raised capital know that selecting the right people to be at the boardroom table with us one of the most critical business decisions in the life of a start-up. We can forget that cash is a commodity, especially when our start-ups are running out of it. When this happens, we can look past those deal terms (and people) that tend to mis-align incentives, and we don't ask our investor partners about how to keep our interests aligned as the storyboard either unfolds or as often happens, goes in a different direction.<br><br>Regards,<br>Peter Mark:

A very insightful post! I have experienced firsthand what happens when the interests of the entrepreneur (me) and the investors (angels and venture funds) are not aligned. I do believe that at least some proportion of the responsibility rests with the entrepreneur during the search for cash when they should be doing their own due diligence on their prospective investor partners. All of us who have raised capital know that selecting the right people to be at the boardroom table with us one of the most critical business decisions in the life of a start-up. We can forget that cash is a commodity, especially when our start-ups are running out of it. When this happens, we can look past those deal terms (and people) that tend to mis-align incentives, and we don't ask our investor partners about how to keep our interests aligned as the storyboard either unfolds or as often happens, goes in a different direction.

Regards,
Peter

]]> By: Kevenwculp http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-21362 Kevenwculp Fri, 10 Dec 2010 14:04:34 +0000 http://www.bothsidesofthetable.com/?p=824#comment-21362 I agree with all of this. As far as the people who don't think it's fair to the rest of the employees who don't get to take money out - "get over it" is what I'd tell them.<br><br>The "key players" had the vision and drive to start the project, you're just along for the ride. Remember your role.<br><br> I agree with all of this. As far as the people who don't think it's fair to the rest of the employees who don't get to take money out – “get over it” is what I'd tell them.

The “key players” had the vision and drive to start the project, you're just along for the ride. Remember your role.

]]> By: Mike Schinkel http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-21105 Mike Schinkel Wed, 08 Dec 2010 00:53:58 +0000 http://www.bothsidesofthetable.com/?p=824#comment-21105 @Renato: Great comment. I think your final point bears repeating: <br><br>"Getting the founder's family strained and against the startup is bad for everyone including founders, VCs, families and Startup." @Renato: Great comment. I think your final point bears repeating:

“Getting the founder's family strained and against the startup is bad for everyone including founders, VCs, families and Startup.”

]]> By: The Entrepreneur Thesis | CloudAve http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-1013 The Entrepreneur Thesis | CloudAve Mon, 01 Mar 2010 14:36:54 +0000 http://www.bothsidesofthetable.com/?p=824#comment-1013 [...] we should swing for the fences and create a larger company.  If I really believe it I ought to let you earn now by taking money off of the table.  I have already written about this.  I believe our incentives need to be aligned at this [...] [...] we should swing for the fences and create a larger company.  If I really believe it I ought to let you earn now by taking money off of the table.  I have already written about this.  I believe our incentives need to be aligned at this [...]

]]> By: Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table : Bloggii – The Global News Aggregator http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-1012 Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table : Bloggii – The Global News Aggregator Wed, 09 Dec 2009 11:41:11 +0000 http://www.bothsidesofthetable.com/?p=824#comment-1012 [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...] [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...]

]]> By: Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table | qface & sowmo sky http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-1011 Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table | qface & sowmo sky Wed, 09 Dec 2009 06:49:21 +0000 http://www.bothsidesofthetable.com/?p=824#comment-1011 [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...] [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...]

]]> By: Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table - bruno trani dot info http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-1010 Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table - bruno trani dot info Wed, 09 Dec 2009 03:01:29 +0000 http://www.bothsidesofthetable.com/?p=824#comment-1010 [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...] [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...]

]]> By: Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-1009 Service-now.com Gets $41M Infusion; CEO, CFO Take $37M Off Table Wed, 09 Dec 2009 02:50:16 +0000 http://www.bothsidesofthetable.com/?p=824#comment-1009 [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...] [...] That is ~90% of the money received in the tranche and over 55% of the total round. From time to time discussion flares up about the idea of founders taking money off the table in funding rounds. It [...]

]]> By: Harry van der Veen http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-10035 Harry van der Veen Wed, 28 Oct 2009 00:28:33 +0000 http://www.bothsidesofthetable.com/?p=824#comment-10035 Nice post. Many valid points. <br><br>In my opinion (in regards to the spouse topic), it is just very unwise to keep a door open for a spouse to have the opportunity to take your money if things go wrong.<br> <br>Yes you hook up together in a period that you trust each other, but when people separate the fight can be very very nasty. In that case you just want to make sure you have your assets covered, in this case meaning that you want to avoid that your spouse can try and claim a big cut of your money or your company. Nice post. Many valid points.

In my opinion (in regards to the spouse topic), it is just very unwise to keep a door open for a spouse to have the opportunity to take your money if things go wrong.

Yes you hook up together in a period that you trust each other, but when people separate the fight can be very very nasty. In that case you just want to make sure you have your assets covered, in this case meaning that you want to avoid that your spouse can try and claim a big cut of your money or your company.

]]> By: Harry van der Veen http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/comment-page-3/#comment-1015 Harry van der Veen Wed, 28 Oct 2009 00:28:33 +0000 http://www.bothsidesofthetable.com/?p=824#comment-1015 Nice post. Many valid points. <br><br>In my opinion (in regards to the spouse topic), it is just very unwise to keep a door open for a spouse to have the opportunity to take your money if things go wrong.<br> <br>Yes you hook up together in a period that you trust each other, but when people separate the fight can be very very nasty. In that case you just want to make sure you have your assets covered, in this case meaning that you want to avoid that your spouse can try and claim a big cut of your money or your company. Nice post. Many valid points.

In my opinion (in regards to the spouse topic), it is just very unwise to keep a door open for a spouse to have the opportunity to take your money if things go wrong.

Yes you hook up together in a period that you trust each other, but when people separate the fight can be very very nasty. In that case you just want to make sure you have your assets covered, in this case meaning that you want to avoid that your spouse can try and claim a big cut of your money or your company.

]]>