Tuesday was my last day as CEO of CircleUp
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Also hindsight is 20/20 but if you work with an asshole it’s not your responsibility to shield him. Escalate to the other board members and have them deal with him. He clearly values their respect so one of them (or better all of them) needed to sit him down for a talk.
> but if you work with an asshole it’s not your responsibility to shield him.
This
Let them hang themselves
http://webcache.googleusercontent.com/search?q=cache:-EgQnmp...
The former CEO should take down the feedback email, as he is exposing himself and others to legal liability.
He is not the only one who has had to deal with toxic investors who sit on startup boards. It's driven many good people away from companies they've founded. Sometimes the toxic board members are not newbies, either - they're supposed pros. Not sure what sort of due diligence can sniff these jerks out before they join the board, and maybe it's not even possible to turn them away if it's a condition of getting investment.
The email also adds context to Vinod Kosla's famous message: https://techcrunch.com/2013/09/11/vinod-khosla/
Some people naively view investment as "just money". This is an honest warning showing the real consequences of that incorrect view.
Overall it's just very hard in the US to sue someone for telling the truth about how awful you are.
“A dentist can only sue you for a bad review if the statements are untrue” and
“Overall it's just very hard in the US to sue someone for telling the truth about how awful you are.”
https://fclawyers.com.au/checking-facts-before-you-write-rev...
Or am I mistaken about US law? I think it is even worse over there, you can basically write what you want, as long as nobody can prove it outright wrong. Just imagine all the New York Post articles somebody would be sued for.
Most outright defamatory articles just end in a "Welp, sorry?"-situation and nothing ever happens, because "It could have been true, right?"
I've never written anything about that time, despite wanting to, but this is the thread I wish I could write. Details aside the emotions are all the same. It felt cathartic to read this.
On my desk is a rock, just a hand sized piece of chalk off the foreshore near me but it has special meaning, I picked it up at 2am on the night I decided I wasn’t going to kill myself after flipping it from hand to hand for several hours while sat watching the moon on the water.
Now it sits under one of my monitors and when work starts to stress me out or life generally I pick it up and think back to 6 years ago.
These days my health is under control, the chrohns is stable, the medication works for quality of life, I have a good well paid job and I met the love of my life so between now and that beach is 6 years and a universe apart but man, you don’t see the signs until afterwards eh.
No one knows what the rock means to me, to everyone else it’s just a paperweight.
None of these persisted. They'd all come and go. When I went to the doctor, all tests showed I was fine, which stressed me out more.
Given that he posted the e-mail contents online and wrote it in a way to narrate the board member's own bad actions, I'm assuming the real intent to was to warn others against working with this person. He stops short of naming the difficult board member, but it wouldn't exactly be difficult to figure out who it was from all the clues.
Theoretically this would be easy to figure out if you had a yearly listing of board members which I imagine should be public, but that doesn't appear available publicly. The only listing of the board I can find is this news article [0] from 2015, but again, none of the people listed there can be definitively identified as the one being referenced.
As further evidence of how murky this is, several people in the comments below have named different people as the person being referenced. One commenter has edited their comment to change the person being accused.
If the author of this email wanted to point a finger at a specific person, they did a bad job.
[0]https://www.crowdfundinsider.com/2015/01/60650-lending-club-...
But I strongly disagree with you.
Collaborative Fund led the Series C round. Jay Kim was a fairly fresh venture investor at the time; the model and operation of NXC/Nexon's investment arm was quite different to the traditional VC. Based off the timings, it's highly likely this is the VC who the e-mail refers to.
sounds like Craig Shapiro is the likely culprit here
However, while the lead investor companies are established, the "partners" of the lead investors listed on crunchbase do seem to fit the fresh investor note. Especially since Series B and C were 5-6 years ago.
Time to rewatch Inception.
[edit] Is giving the accused a platform to defend himself that unpopular of an opinion? Online shaming often gets out of hand and goes too far. I recommend this TED talk: https://www.ted.com/talks/jon_ronson_when_online_shaming_goe...
1) Contact the accused party and ask him for a written response. By giving him the opportunity to defend himself, you get a more balanced view and decrease the likelihood of cruel & unusual punishment.
2) Out the investor in private forums where data/information that arises after the publication of this article can be fully considered. YC and many other founder networks have investor databases for this purpose.
2 - no, I disagree strongly for two reasons:
Keeping information in a quiet private forum makes it inaccessible to people at large. This means the next CEO who runs up against this investor is mostly completely unaware of their past actions.
And, honestly, hackernews is probably the single most relevant forum you could find to discuss this on - it has a general lean toward tech but it is run by ycombinator which is specifically interested in all things investment.
I agree this is the downside of my proposed approach. But, the alternative is a world where someone's reputation can be irreparably damaged by unsubstantiated claims made by one person.
Do you want to live in a world where someone's reputation and livelihood can be destroyed by unsubstantiated claims? You may think I'm overstating the potential damage, but I think people generally underestimate the damage the internet mob can inflict on a person.
I would rather live in a world where the powerful can be baselessly attacked compared to a world where the weak are unable to fairly attack them - if we need to err on one side or the other I prefer to put up with trolls and scammers.
Even without outing the investors, many founders are currently doing the necessary research to identify the investor and will blacklist him.
I think we should keep in mind that:
1) The accusations are currently unsubstantiated
2) The reputational damage to the investor is already significant and largely irreversable
3) Outing the investor here will significantly increase the reputational damage to the investor
Given the above, I really don't see how it's fair to out the investor before substantiating the accusations or giving the investor time to respond.
EDIT: left out the keyword NOT in the 1:1 comparison
I'm saying that we should keep the identifying info private until the accusations are substantiated.
The internet mob is merciless, and will very likely ruin this guy's reputation once he's outed.
By outing the guy, you are presuming him guilty and inflicting steep punishment when he could be innocent.
How do you substantiate an accusation like "you insisted on talking to me at 3AM local time after I just stepped off a plane after a 18 hour flight" (or whatever the deets are)?
In general, yes, but in this case the most convincing candidate is a billionaire. He'll be fine.
The fact that the VC isn't named, makes it difficult for them to reply in a public way and respond to some of those points.
That was the point I was trying to make:
The CEO went out of his way to make the board member as easy to identify as he could, short of spelling his name out.
I'm not suggesting that people try to reverse engineer it, but clearly the open letter was meant to be partially retaliatory and partially a warning to others in this space.
One of the funds mentioned in the wikipedia article and that also matches the description from the email removed CircleUp from their portfolio website in 2019. You can look it up on the Internet Archive.
Meanwhile the next CEO knows there's a rat, and can work out for themselves who that might be before their first 100 days are up, by which point most managers have been typecast. After that it's very hard to fully take advantage of major new insights you've had. It's an uphill battle to make major changes to your style of management.
There is absolutely nothing wrong with knowing about, and discussing who it is and possibly who else has had the same experiences - as long as it isn’t mudslinging but a professional discussion. Similar to the letter.
You should keep in mind that the investor may actually be innocent here. Imagine if the CEO was a sociopath who is both adept at manipulating public opinion and out to destroy the investor's reputation.
I'm not saying this is fact. I'm saying it's possible.
Outing the investor here will cause significant, irreparable reputational damage to the investor.
Given that the accusations are based on unsubstantiated claims, outing the investor is wrong.
Please don't underestimate the consequences of your actions. You may see it as just 'discussing some random topic on a forum'. But, doing so could be ruining an innocent person's life.
Bad investors, bad board members, and even bad incubators are a dime a dozen.
Naming this 1 investor focuses the discussion on that single investor, rather than bringing awareness to the situation itself, and how commonly these things happen (yet how rarely anyone talks about it).
I liked someone's comment about preferring to let the focus be on Ryan's journey, and I suppose that many others here must be feeling a sense of kinship with a fellow entrepreneur as he described candidly and courageously his version of "The Struggle."
Sure, so that the lesson isn't lost, though, we may want to learn from Ryan's sobering experience and think harder about this too: Which investors we choose to collaborate with, come due-diligence time.
EDIT: #sarcasm if it wasn’t obvious.
But I feel the pain everyday of having to answer to my managers who are constantly asking for status on my projects. I care about my managers but I don't care about the projects. I hate my work.
There are so many things in life that I am curious about like singing, drawing, gardening, bird watching, etc. I'm not good at any of them (nor do I wish to be) so they won't bring me any income. Every day I put my curiousness aside to code some stuff to make my managers look good.
I can't quit my job to take a break because my wife and kids depend on my salary for money. My neighbors are suffering more because they are not in tech. They are trying so hard to have my life and I try my best to help them get into an industry I don't even like.
Money brings so much suffering and our entire society is built on it. Society is greedy and wants to expand infinitely too! Everything in nature must eventually be owned my someone.
It seems like the only way to escape is to become a CEO, make millions, and buy a bubble of eternal happiness as Ryan has done.
I hope I don't end up behaving like his former board member.
That said, I do wonder how Elon Musk, who's simultaneously trying to send humanity to Mars, convert the world to electric cars and solar panels, and create direct neural uplinks doesn't crack from the pressure though.
Not to mention what I would consider the most important commitment for any parent: how does he find enough time to be a good father to his 6 kids?
I'd say that not being a good father by choice rather than necessity could be considered pretty wrong.
Here we are deep into a comment thread about a completely different company and you are spreading elon's message about the price chance of his product for free.
thats a genius move by musk.
You call it erratic. Others see it as eccentric. And, that draws eyeballs.
Put another way, not everyone wants to do the same things you do.
Some startups are built to grow. Some are built to flip. Some will never go anywhere but fill people's pockets and egos. But many many more just fail.
There is little relationship between the alternate reality that is the startup world and the more mundane, sedate, and less interesting traditional business world.
Tweet storms and email chains like these read like the startup version of Jersey Shore or Housewives of OC.
When will people understand that the VC industry is a form of money management? It's an investment vehicle focused on generating a particular kind of return by investing in a particular kind of company.
VCs don't invest in businesses as much as they invest in return-generating vehicles. If you can find a way to turn a grilled cheese business into a billion-dollar return-generating vehicle, then the VC will invest in it. It doesn't matter if it's an actually sustainable business or even really a business at all. Heck, you could be giving away grilled cheese and putting advertisements on the bread and if it fits the VC model then VCs will invest in it[1].
This is why "businesses" like WeWork are so divorced from business reality. Because they don't need to follow the typical path of traditional businesses, which are dependent on cash flow and customers and mostly industry or region-specific competition. Banks can loan to traditional businesses they understand. VCs invest in the businesses that don't fit those molds. This is why venture investing exists - to chase those non-traditional businesses that have the promise / potential to generate huge returns. The specifics of the business really don't matter.
It follows then that if you're building a VC investment-return generating vehicle then what you're doing is not the same as building a "normal" business. You're in an ecosystem dominated by the needs for big returns. Board members don't know about or care about traditional business needs. They only care about the dynamics of investment return vehicles. This reality is not the same as the traditional business reality.
Which, I don't doubt he went through all this, but just can't help the bad taste in my mouth given the "I'm just selflessly saying things to help others" tone.
But hey, maybe I've just grown to be overly cynical after spending too much time around growth marketers.
I guess the other question is... if there is good to be done, and being this kind of person causes a certain amount of help to hurting communities, does this form of vulnerability capitalism have a downside? (assuming its done with respect to the person's family and friends, who never asked to be thrust in this weird limelight)
And a question I often have to ask myself, what if it is nothing but genuine? How does one call out BS without trampling on the spirit of the genuinely hurting?
Listen to signals your body sends, if there is no fun soon, it means STOP. Oh yeah you can watch datapoints, brainscans and talk to experts for years, but listen to what you feel is enough. It is hard to beat that "intelligence" sensor encorporated in the human shaped by thousends of years of evolution.
I wish this guy al the best, this maybe is the best thing he ever did.
I hope he can find back to a more satisfying life with lots of lifetime, enjoying doing fun things with his family!
No need to track down that destructive board member. He is sitting at work right in front of you on a basket with $$$, you listen to him as you think you need it for food and if you are priviledged for "dreams".. maybe just look in a mirror ?
How exactly did the reading of this post make you conclude he did the least work?
I am really starting to get agitated by this pettiness on HN. It didn’t used to exist in tech.
It was one of the more interesting companies profiled and I found the module very cool. If you read this Ryan - thanks for being part of it, and all the best for the future.
That said, I have one question. What on earth was the co-founder doing? Isn't it the whole point of having co-founders so that you can share the trauma? Why did the CEO have to suffer through so much pain all alone?
This would be an immediate red flag. How do you handle this type of issue?
Whenever I write something like this I've found I end up constructing each tweet a bit like a lengthy bullet point. I cut everything unnecessary and try to make my point as clearly as possible in as few words & tweets as possible.
When I write a blog post I naturally end up optimising for writing quality, and what could have been 5 tweets ends up as 1,500 words.
This is presented as a victorious journey. By the end of it he's got his health back, his kids, an easy job, lots of money. The company's in good shape - everyone's a winner.
And you're telling readers - it's GRIT! I'm a super Gritter! I never give up!
Mate, you got so lucky, to be alive, to have kids.
Yet you lost years of your life, plus all your kids' early childhood fretting over terrible bosses. And by the end of it you're still wondering whether in future VCs will find you worthy of investment.
And in our day and age you're considered a winner!
You're the person YC points to and says - See him, you could be like him one day!
"Life, if you know how to use it, is long.
But one man is possessed by an avarice that is insatiable, another by a toilsome devotion to tasks that are useless;
one man is besotted with wine, another is paralyzed by sloth;
one man is exhausted by an ambition that always hangs upon the decision of others, another, driven on by the greed of the trader, is led over all lands and all seas by the hope of gain;
some are tormented by a passion for war and are always either bent upon inflicting danger upon others or concerned about their own;
some there are who are worn out by voluntary servitude in a thankless attendance upon the great;
many are kept busy either in the pursuit of other men's fortune or in complaining of their own;
many, following no fixed aim, shifting and inconstant and dissatisfied, are plunged by their fickleness into plans that are ever new...
Ask about the men whose names are known by heart, and you will see that these are the marks that distinguish them:
A cultivates B and B cultivates C; no one is his own master."
-Seneca, On the Shortness of Life
> Believing that to attract a great CEO we would need more than two years of runway
What is involved in this process that takes 2 years?
A great CEO has many options in front of them of what to do with their career. Asking them to take on a company that doesn't have much runway limits the time they have to get in, become the new leader, and mold the organization. Therefore, it is not likely to be their best option, which means the candidates who are interested are more likely to be not-so-great CEO candidates.
Let the original founder/visionary execute the pivot and then hand off the reins, rather than pull someone new in and try to brain-dump how you want them to pull off the pivot that mostly exists in your head.
He's not saying the process will take 2 years.
He's saying that no reasonable CEO will sign on to a company that is months away from going bankrupt. Two years of runway is long enough for a new CEO to find their feet, set direction, and work on profitability and/or fundraising.
If the CEO arrives with only a few months of runway, their first tasks will be to cut burn rate by laying off many of the employees. That doesn't create a good first impression.
It might be cliche because its a problem often seen repeated. This is how you get important messages not read or have them taken out of context, even by your intended audience. (we obviously disagree and both perspectives are opinion based)
Sounds like confirmation of an opinion to me if it needs to be said a lot.
I see them as slightly less crazy, but just as annoying as our dear president. Hopeless narcissists who read Ian Rand and The Prince in their teens, and think of themselves as Tony Stark when they're really just Russ Fucking Hanneman.
So this guy fired a college buddy who chose to work for him instead of a better-paying job. "I believed in you". And the story just moves on, like it's a colour detail to the whole thing?
Does this person get a royal severance package? Does the struggling CEO help them land on their feet? That's the kind of stuff I want to know.
With those little details left out, it's just another powerful individual complaining about how hard it is to be powerful and wealthy.
I'm trying to think of ways to make this comment more even-keeled and less likely to be downvoted, but I honestly can't. This kind of stuff bothers me to my bones, and while I definitely support this guy being honest, so much, because I do care about mental health, I can't get past the "here's my hero story, forget about the consequences for the small guys" aspect of it.
That said, I was in a bad mood, and in hindsight I shouldn't have judged based on so little information; I don't know what /actually/ happened. mea culpa.
This would be an immediate red flag in my book. How do you handle this type of issue?
The people we let go had joined because they believed in our product and mission. They had done nothing wrong, yet suddenly there was no longer a place for them. I remember letting go of someone I had known since college. She turned to me and said, “I took this job over something that paid more, and now what should I do?” These agonising decisions kept me up at night for weeks, and I know it was much harder on those affected.
That group of professional challenges was more difficult than anything else I’ve faced in my career. At the time, I told a teammate that it felt like I was playing seven-dimensional chess because of the complexity of the negotiations combined with so many conflicting challenges at work.
I was also juggling personal challenges that were far more stressful than the hurdles at work. It started with absolutely brutal fertility issues that my wife and I went through, beginning in 2016. One of those tests revealed unexpected, terrifying information. I was diagnosed with cancer. I only remember a pair of words from the first conversation with my doctor: “two tumors”.
For the next several months, my emotions would sometimes pour out in a tidal wave of tears and yelling. Anger, frustration, fear, confusion — there were so many feelings to contend with.
I worried that the team would use my diagnosis as an excuse to throw in the towel, that my health would become a distraction, cause the company to fail and make things that much worse.
To this day, I cry every time I go to the cancer center at Stanford.
I hadn’t had a headache in 20-plus years and now I couldn’t go through a full day without experiencing crippling pain in my head.
By the end of 2017, I was completely worn out.
Persistence was my superpower. But now I’ve now come to understand that persistence is a double-edged sword, and my decision not to take a break, to not take more off my plate, hurt me, my family and the company. That was the biggest mistake of my career.
depression and burnout can make even small challenges feel like a big deal.
I had gotten to a place where I only focused on the losses and couldn’t accept positive things.
my daughter looked at me and said, “Daddy, you always look so sad”. She was five. It was the push I needed to change.
A successful and healthy transition requires one to live in the nothingness between the end of one period and the beginning of another.
FINALLY HIS FIRST EMAIL(feedback to the board member) IS AN EXCELLENT READ.
What a shitty thing to say. I'm sure she was an adult when she joined, fully capable of making her own decisions and weighting up pros and cons.
From reading other posts by Ryan, he seems to be trying to talk about the general problems he faced that simply don’t get surfaced often (for example, due to the associated risks to your career.) He provides enough detail to help anyone likely to be in the know to identify the person.
There is a very difficult balance to make, and he has clearly been careful about judging that balance, and getting feedback from others on that balance.
The selected passage:
"A great board member, Dan, called me to say, “Ryan, I’ve never in my career seen a CEO as worn out as you. Please, you need to take a sabbatical — at least six weeks”. He, and other board members, tried so hard to do the right thing and convince me to take care of myself."
Further, on LinkedIn, Dan still lists himself as a current member of the Board of Directors. CircleUp is still listed as a current investment on Canaan's site.
I have not worked with Dan but I have worked with Canaan. They have always struck me as founder-friendly. Indeed, they have several notable repeat entrepreneur relationships. It seems unlikely they would tolerate the sort of behavior Ryan described.
---
Conversely, Collaborative Fund led the Series C in November 2015. Note that, in Ryan's letter, he cites board issues from 2016 to 2019. Further, Collaborative Fund no longer lists CircleUp anywhere on its site.
Per Crunchbase, Jungju (Jay) Kim was the board partner for Collaborative's Series C investment in CircleUp.
Note that, per his LinkedIn, Jay became a VC at Collaborative in 2014.
https://en.wikipedia.org/wiki/Kim_Jung-ju
There's way too much detail and it's all incredibly flattering, stuff like:
He is known for strategic investments that aren’t limited to gaming companies, and he has acquired firms and invested in various fields. Being an avid Lego fan throughout his life, in 2013 he purchased Bricklink, the world’s largest online marketplace for Lego toys.
It sometimes surprises me that wikipedia can be gamed this easily.