How to Avoid Being Pushed Out of the Company You Founded

"Chuck its not about the money, until there is a lot of money and you're not getting it. I mean when its all hypothetical you can be generous, but when its not hypothetical, and the piece being offered is not what you had informally agreed upon, you tend to stop seeing what you're getting and instead focus on what you are not getting. That can be toxic."

I think its just basic human nature.

Respectfully, I disagree to some extent on this point. It's always a good idea never to attack others. And ideally, you hope you'll never come under attack yourself. But if you do, you don't want it to take you by surprise.

Consider this quote from the article:

"'I think it’s easy for people to jump to the side of the founder against the big bad investor,' Mr. Blumberg said. 'But we’re all grownups and you sign the papers you sign.'"

This may come across as cold-blooded, but let's be honest, there's a grain of truth to it. Startups are every bit as political as BigCo, and in some cases, even moreso. Whenever we see these stories -- and maybe it's just the popular mythological portrayal of them -- we see them as heartbreaking tales of betrayal and shattered friendships. But perhaps they're better described as tales of political savvy vs. naivete -- of ruthlessness vs. innocence. The business world often rewards the former, and rarely graces the latter. Nice guys usually finish last.

It may be sad. It may not be right. It may not be the way we want things to be. And maybe there is a "better way" to be discovered. But, no matter the case, people can't afford to place unconditional trust in each other. When big money and influential outsiders enter into an equation, people's incentives change dramatically. Eyes should be kept open to that fact. Even if we don't assume people will, by necessity, turn on us at some point, we shouldn't rule it out. It's not that people are assholes; it's that the upper echelons of business are cutthroat, and people usually respond according to their economic incentives. As the co-founder of a small, early-stage company, you don't need to concern yourself with these things. But the second you've got a VP stripe, or especially the letter "C-" in your acronym, you've got a target on your back. You need to be mindful of it.

This doesn't excuse the nature of the game, but it does offer fair warning to any who'd play it. Keep stock of everyone else's hand. Know what cards they've got. Know how they may, or may not, be able to play them. Know what they stand to gain or lose by doing so, and the magnitude of that gain or loss.

There's no great excuse for being a dick, but there's equally litttle excuse for being a Polyanna. I would never advocate that we all actively seek to screw each other over. Rather, I'd suggest we keep our guard up -- especially around times of big organizational shift (new funding rounds, board changes, big new hires, etc.).

In the one case I've been a witness too, it was the same. It's usually quite expensive to force a founder out, but that dosen't make it any less tragic.

1. For better or for worse, Martin Eberhard was ousted by Elon Musk and the Tesla board in a power play, not the other way around.

2. The slander suit was long afterwards and has little to do with power plays at all.

I've learned this over the past couple of years. As soon as you see the slightest bit of success, someone will try to take it from you. If you aren't defensively strategic, they will succeed.

The problem is that any hint of money brings the predators.