Someone on Quora asked:
How do I quit the startup I founded without causing too much fallout?
Our business has been around for two very tough years, but is finally seeing the green shoots of growth that sprout after hard effort, love and dedication has been applied.
We’re generating revenue and were seed-funded to the tune of $500k. We’re in talks for the next tranche of funding from two well-known angel investors.
The problem is, I just can’t afford to live like this anymore…I am haemmoraging money and my family are starting to be affected.
This was my response:
It’s quite funny. Most people would love to be in your situation, working with a business that is about to pick up momentum. I can definitely understand the personal situation though, especially since I’ve lost my 2,600 square foot loft and my Lexus.
A CEO is technically the leader of an organization. A company without a leader is bound to fail. Even if your company is profitable now, once you walk away, things may change quickly.
Example: When Myspace was bought by News Corp.
More than likely, your investors do not want to lose out on their investment. Leaving your company could potentially cause them to lose money, just because you aren’t around to guide the company in the direction it needs to go. Unless you’re a Product CEO and the COO is doing all the real work.
If I was your investor and I knew you were going to go through hard times and you brought this to my attention, I may possibly issue you a loan, buy out some of your personal equity, add additional money into the fund, issue you a raise, or give you some cash.
My friend was in a situation like yours. He was living in an unfurnished apartment with only a mattress in San Fernando Valley and working out of his friend’s garage. He has a billionaire from Florida backing him. He just brought this situation directly to his investor’s attention and everything just worked out.
His investor took really good care of him. Now he lives in a Penthouse suite on the 16th floor of Sunset and Vine, which is basically the tallest building in Hollywood.
I don’t think he’s even turned a profit yet because he’s working on an Enterprise based software, but with the meetings he’s been having, he will be doing so really soon.
Originally posted on Quora.
Leonard Kim is Managing Partner at InfluenceTree. At InfluenceTree, Leonard and his team teach you how to build your (personal or business) brand, get featured in publications and growth hack your social media following.