“Wow must be nice, you’re lucky!”
For the successful entrepreneur how many times have you heard this? In the world of “ustas” I used to get really mad about that when someone would say this to me or someone that I knew. I suppose jealousy and envy cloud the mind.
I have a good friend who is an accomplished martial artist and weapons expert with multiple level black belts in various forms. He is fond of telling his advanced students training up in the hills in some remote local, “Luck has nothing to do with why you are here.”
There are some that say that having an exit for your startup is complete luck. Ok fine. So be it. We can argue that one later. What I want to discuss today is what happens post acquisition with the founders and principles of a startup that has been acquired with the proper frameworks in place. Lets take a recent example of the high profile IPO of Tesla. The PayPal Mafia is a great example of how to take care of the people that make the company sucessful. It is also a great example of how the machine works. During my last startup here on the right coast I was continually asked why I started the company? Well lets see: take an idea, create some software, sell it, make money. Money, Oh yea Money. Actually what I stated was to create a proper venture capital firm much like a Y-Combinator but with more cash. A good rule of thumb is to not create a company specifically for the company but create it for the next scenario. the paypal founders rewarded their people. Musik only had 11.5% at the time of the $1.5B dollar sale. Yet he got back together with his people and started something else and did it again – Rinse – Cycle-Repeat. It is estimated the collective PayPal Mafia now manages $30B in tech funds and companies. I continually see people who have founded company or are founding companies saying they will not give up the equity. Your choice. You must give to get, Yin and Yang, Push Me – Pull You.
PLEASE READ: REWARD THE ELITE PERFORMERS – HEAVILY – THEY WILL NOT LET YOU DOWN!
During the last go around I had a good friend of mine who has amazing experience come up from a semi-retirement from St. Marteen Island. He called me from the harbor club where he landed and said, “I dont need a salary or contract I just want Equity. We can figure it out later, lets start coding.”
Take that to the bank all day. I gave him multi-digit percentages. So for those that are trying to get something off the ground or after years cannot scale because you cannot find the right people. Give the blood. Give the equity. It is not luck.
I’ll leave you with a quote:
” The inferior man’s reasons for hating knowledge are not hard to discern. He hates it because it is complex — because it puts an unbearable burden upon his meager capacity for taking in ideas. Thus his search is always for short cuts. ” ~ H.L. Mencken
Go Big Or Go Home!