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Team issues with founder and investor

So, I left a well paying corporate job to join an early-stage startup. The founder brought me in as co-founder, and gave me a significant chunk of equity (vested over 4 years). The agreement was that both of us would work 80% of our time on the startup, and have the ability to focus 20% on other projects to help us cover expenses. We have one investor who is working with us almost full time. Him and my partner have known each other 35 years.

I’m the only one being paid living expenses (several thousand dollars per month). As soon as I joined, the team dynamics changed. The investor and my partner tend to spend their time doing all the ‘fun’ stuff – spending time at breakfast and lunch meetings and making connections. I’m being asked to do all the hard work. Whenever I bring up the topic of how the entire team needs to focus on product market fit, my partner repeats that he’s counting on me to handle that side, as well as handle growth of the user base. This makes no sense to me… that is pretty much the entire business! There isn’t much else to do (other than fundraising) until we have product market fit, and have demonstrated traction.

I believe in the idea and am happy to do the work, but I’m not happy to have to do all the work. I also feel like my partners don’t want to include me in meetings they have with other people. A couple of times, I’ve brought large potential partners to the table, and have found myself cut out of the conversation/relationship that I initiatied.

I go back and forth on whether I should quit. I see my partner’s point of view – he raised the initial money, and spent about $80K of his own money on this. And his relationship with the investor goes back a long way. But I feel exluded/not respected by my team. Out of the three of us, I’m the only one who’s ever done a tech startup before. I feel I have important stuff to contribute in terms of direction-setting of the company, yet feel like the other two make the decisions ahead of time, and then just bring it up in front of me and act like it is a team decision-making session. In short, I don’t trust my team, I don’t feel respected, feel like I’m doing the hard work but getting none of the fun benefits of meeting potential investors, potential partners, etc.

Would like other’s perspectives on this.

  • That really sucks.

    There’s a good chance you were brought on specifically so you could do all the work.

    Imagine yourself in their shoes for a moment. Once you have a bit of money there tons of startup opportunities worth exploring and funding, but very few of those opportunities are worth fully dedicating yourself to for the next 8 years. So you do some work in the beginning and you put some money in, and you find somebody to build the prototype and first phase of the business road map. If the startup shows a lot of promise you can swoop in and become a hands on investor/CEO, if the startup doesn’t show a lot of promise you can be more hands-off and let the 2nd tier co-founder make most of the decisions. Or maybe you’ll just sell the startup for a quick profit.

    If this is what’s going on then the only case in which you get to be involved with the decision making is if the other two founders lose interest because the startup is floundering or because they see a better opportunity for them to pursue and then they can keep the equity (they’re not on a vesting schedule because of course they’re not) without having to be involved with the day to day.

    They have constructed the deal in such a way they can have their cake (equity + involvement in the startup for as long as they want it) and eat it to (the option to walk away whenever they want, knowing you’ll be happy to take over because you haven’t vested). This deal is pure upside for them (worst case they’ll lose a bit of money) and a mixed bag for you. If the startup fails the opportunity cost is significant for you, and you’re at risk of getting pushed out if the startup succeeds.

    On the bright side, they probably can’t afford to lose you at this stage without the startup failing. That means you have leverage for the time being. As the startup employs more people you will become expendable, so if you want to renegotiate you may want to do it sooner rather than later.

    All of this is purely speculative, of course, but I’ve seen it happen before.

    Reply

    • This is true. Your value to them will decrease over time. Im assuming that the board structure also doesn’t favour you (no independents that can take your side and push out the CEO).

      It’s my suggestion to confront them and tell them clearly how you feel. Ask specifically to be included in meetings and set expectations for how many hours they will put in and what work you expect from them. Dont let the fact he’s the ‘CEO’ and you are ‘below him in the heirarchy stop you from ordering them to do something. Its a three man startup.. there’s no such thing as a CEO.. everybody is important and should have significant say in matters.

      See how they respond. If he continues being a dick about it, then my friend it’s time to pack up and leave. There is little upside for you here. You will put all the effort in but won’t get half the reward that the other guys will.

      My guess is that they have been counting on you to be submissive. You have to threaten to leave. If they haven’t done any work so far, they know they can’t do shit without you.

      Reply

  • I’ll go out on a limb here and guess that you’re an engineer tasked with building out the MVP, while the other two are focused on fundraising/”sales”?

    I see a lot of engineers at early-stage startups who think they could do a better job at fundraising/making overall business decisions/going to the “fun” meetings than the current CEO/etc. IMO this seriously undervalues how freaking hard it is to raise money and figure out where to steer the ship, especially when the person doing the complaining doesn’t have anywhere near the same skin in the game cash-wise.

    This is probably a situation that would be easily resolved with a good grown-up conversation about roles, respect, and expectations; I highly recommend you sit down with them and calmly explain what’s frustrating you.

    Or, if you really think you could do a better job yourself, do it! You have potential partners and connections; go out on your own, raise money, build a team and a product from scratch around nothing but an idea.

    Reply
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