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January 30, 2008

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» "Doing Lunch" With Your VC Calls For Tightening You Belt from Innovators Network
Learn what's in store for you when your venture capital fund peeps invite you to lunch, complete with a personal introduction to a new person who would benefit the company greatly through his connections or industry experience by reading a [Read More]

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This happened to our company last year. The company was doing well hitting its numbers but the VC wanted their in-house entrepreneur to take over the helm. The founder who was a great CEO lost 90% of his equity. The fuckers.

How do they lose their equity? Where does it go?

It's in the fine print. If you're fired or die the VC gets to yank back your common shares into the pool of unallocated stock.

Great post! I like to think I have a thorogh understanding of venture capital but still learned a lot from you. I will remember this post when I start dealing with them.

This is true. After completing my MBA, I was hired by a Sand Hill Road venture capital firm where I worked for six years before leaving to start my own company. This is how founders are kicked out. The trap is set over a friendly lunch. The founder naively agrees to the board addition and the axe comes down within days. Sometimes it happens at the next full board meeting. But just as often the founder receives notification from a secret board meeting, to which he wasn't invited, that he's been terminated.

I have seen a dozen of these firings and in at least three quarters of the acses the venture capital firm just wanted their own man in the driver's seat.

Whoa! I guess a little girding of the loins is in order before traipsing off to a 2-martini VC lunch, nu? Surprise!

It's not about friendship or fun, it's about power and money, let us not forget.

Thanks for your thoughts on eating some humble pie.

Anthony Kuhn

you folks need to read venturebacks

Who picks up the tab at these lunches?

Keep up the good work. Most bloggers are a mutual ass-kissing society and little more.

This is a refreshing change from the usual self-serving stuff posted by venture capital asskissers. Thank you for daring to tell the ugly side.

Mmmm...This post makes me feel all warm and secure.

I do not doubt that a low U.S. federal-funds rate in response to the dot-com crash

Surprsing or Not? 50% of venture funded startups fire CEO/founder in first year [VOTE] - http://www.thriveorfail.com/b6509

Blogs are so informative where we get lots of information on any topic. Nice job keep it up!!

is it worth to check integrity and professionalism ?

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