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Should founders air their complaints on social media?

This post was previously edited by a moderator.
I saw a tweetstorm/article that Lane Becker, Cofounder of Get Satisfaction released last week about how his company sold (he left/was pushed out many years ago) and he and his cofounders did not find out or get a dime. And he was not happy about it. On the one hand I appreciate his honesty in world where everyone just says "congrats" on any sale. On the other hand, it seems a bit immature to air your dirty laundry on social media. How do others feel about this tactic and whether or not it's appropriate?

29 Replies

David DeMember
4
0
David DeMember Advisor
Co-Founder at Toi
Lane's a good guy and sadly his story doesn't seem uncommon. I don't think "airing dirty laundry" is an adequate way to describe the situation. Most people seem to think raising money is just about how much can you get. Ironically, the season premiere of Silicon Valley addressed this last night.
Christi Muoneke
5
0
Christi Muoneke Advisor
Corporate Counsel | Advisory Board
I see this as a great public service to other founders. Sometimes the highest priced offer/valuation isn't the best deal.
Alexandra Damsker
2
0
Innovative blockchain marketplace
I think it's not a great idea. While I complete understand the motivation, all communities are small, and eventually you may want to be involved in another startup - investing, operating, or even as an employee. Tempers are short, but memories are long - and the internet is forever.

As an example, remember when the the Reddit employee tried to do an "I was laid off" AMA, and YISHAN WONG came in and blew him out of the water on reasons for being fired? Horrible for the employee, an HR nightmare. While the parties may want to forget this, it's forever searchable (thanks, Google!), and juicy enough to hold interest for a long time.

https://np.reddit.com/r/IAmA/comments/2iea97/i_am_a_former_reddit_employee_ama/cl1ygat?context=3

Bad idea. Just bad.

Kind regards,
Alexandra

John Seiffer
1
0
John Seiffer Advisor
Business Advisor to growing companies
I don't know the tone of what he wrote. If it was vindictive or personal then perhaps unwarranted. But if informative then great. People need to hear that side of the story.

As an angel investor I've been pitched to by serial entrepreneurs with exits in their history, who didn't get much themselves.
Lane Campbell
1
0
Lane Campbell Advisor
Lifelong Entrepreneur
This guy has a great name. Seriously though, he got paid by drawing salary from his investors funds and a whole lot of those investors never recouped their investment. Moral of the story is to raise money when you don't need it. Bootstrap as long as you can. The world is rubber, there are a lot of people with money out there, you can get your terms.
Benjamin Olding
2
0
Benjamin Olding Advisor
Co-founder, Board Member at Jana
There's no right answer here: social media is personal branding. Do you want to be edgy, drop f-bombs and "tell it like it is?" There's an audience for that who will love you. Do you want to be the connsumate professional who always says the right thing no matter the circumstances? There's an audience who will love you too.

No one who has poured their life into a business is likely going to judge him, no matter what he writes. I think describing it as a "tactic" is to not quite understand what he's likely wrestling with emotionally.
Alexandra Damsker
3
0
Innovative blockchain marketplace
I think Angie Hicks of Angie's List had 1.5% when they exited. Not exactly the same as Mark Zuckerberg's story.

Moral: know how much you'll need to get to exit (or at least be in the ballpark), and work your way backwards when planning fundings. Keep that cap table as clean as possible, or you'll get diluted out.

In terms of disclosure, agree with John Seiffer - tone (and discretion) are key.

Kind regards,
Alexandra
Michael Barnathan
0
0
Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
More please! Sounds like they agreed to liquidation preferences in their $10m round or somesuch thing, then sold for less. In that case, they wouldn't see a dime regardless of their percentage ownership, since the investors recoup first.

I personally favor exiting faster and smaller, and as they say, they should have done that here. This requires a good read of the market and how sustainable their traction is.
Dwanda Farmer PhD
0
0
CEO/Consultant at The CED Doctor, LLC
Well I appreciate him sharing even if it is simply his way of warning others before they fall into the same pitfall. Sent via BlackBerry from T-Mobile
John Seiffer
1
0
John Seiffer Advisor
Business Advisor to growing companies
An investor I know said that after the A round - subsequent raises only dilute the founders. True they also give the company rocket fuel - the idea being founders will own a smaller piece of a bigger pie. But it's hard to grow the pie big enough and fast enough. And with liquidation preferences the valuations of later raises aren't always true. Not that they are false but with liquidation preferences and participating preferred, later investors often take less risk than the numbers would indicate at face value.

+1 for bootstrapping.
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