Ask HN: Co-Founder Conflicts of Interest | Hacker News Reader

Ask HN: Co-Founder Conflicts of Interest

9 pointsthrowaway9227385 comments

Hey all,

Had a random question for HN. About a year ago I started a business with my co-founder. He has taken the sales and CEO role of the company while I have taken the CTO and CFO role of the company.

About 6 months ago we raised a small seed round from a prominent investor and speaker in our industry. At that time we decided we were going to take $X salary amount for the foreseeable future. During this time our business has grown substantially to about $1M a year in arr.

Where the conflict arises is my cofounder has recently gotten the opportunity through our investor to do some paid speaking to help build his brand, and our company’s brand as well.

Where thing get conflicting are it sounds like my co-founder wants to pocket these speaking engagements and not run them through our business.

Is there some typically best practice here? On one hand I totally get going above and beyond and getting paid for it, on the other hand I’m not submitting a few more PRs and asking for a bonus because of it either.

Where do people usually draw the line? What happens if my co founded expenses a bunch of stuff as part of this opportunity but then pockets the proceeds of doing the engagement into his own bank account?

Definitely new waters here and I want to tread lightly.

He either expenses everything himself and pockets the $$$ or he expenses it through the company and let the company get the $$$. Choose one and accept it.

Just to play Devil's advocate, let's see how this can be viewed positively instead of focusing on the negative.

1) It might be the case that it's easier to get an interesting speaking placement that can benefit him and your company greatly if it's not viewed as corporate advertising. This might be easier if it's not directly intermingled with your company's finances and brand.

2) It seems like your co-founder is mentioning your business positively in his speeches, which shows he's still working at it. It would be bad if he wasn't trying to promote your company in his speeches in some way.

3) His financial situation might have changed. Who knows? Maybe something unplanned happened like a leaky roof happened or a family member's illness occurred. He might be trying to get a little extra income to stay afloat longer and increase his personal runway without it impacting the company.

4) Once you have a few speeches under your belt, the time commitment involved in preparing a few similar speeches is pretty minimal and unlikely to significantly impact his work. As long as he's still putting in the effort at work, this seems kind of dumb.

5) Your role in the company puts your focus on the nickels and dimes. Is it possible that you're fixating on trying to squeeze out every single penny due to your role rather than focusing on the positive bigger picture?

> my co-founder wants to pocket these speaking engagements and not run them through our business.

I can't imagine this would generate a lot of income for the CEO. I've no idea but I guess speaking engagements are in the low thousands or often you do it for free just to get some exposure for the company.

I would let this play out and see what happens.

If this person was an EMPLOYEE, I'd say it's fine. As long as its happening on his own time, all the power to him.

But this is your co-founder. Personally, I would be very concerned about why my co-founder was taking his eye off the ball and focusing on enriching himself. Startups are hard and cannot sustain split attention or split finances. The founders, in my opinion, need to be sacrificial and fanatical about the business.

It's not that I think what he's doing is legally or even morally wrong. I just think it's a big red flag that he's not on a shared mission with you and lacks the focus and drive necessary to succeed. I couldn't go into business with someone who wasn't as invested in the business as I am.

Flip the scenario: you are offered $X to do a speaking engagement that is not speaking against your company (if anything, it is promoting your company)

Why should the company get paid for what you are doing off company time?

So long as what is being asked is neither unethical nor illegal, I see no reason to be upset of your cofounder's [possible] success as speaker. Good for him!

If it is taking away from the company for him to do it, then maybe renegotiate equity %%, salary expectations, etc - but so long as it is not, then it is functionally no different than if he were working as a tennis pro on the weekends

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