I'm leaving my day job. But my CEO doesn't want me to leave.

https://news.ycombinator.com/item?id=565497

by ceoinvest • 17 years ago

17 37 17 years ago

news.ycombinator.com

I work at a company of around 600 employees. I was planning to give my two weeks notice on Monday (to work full-time on my startup), but the CEO caught wind of my thoughts and would like to know if there's any way we can work together rather than having me jump ship altogether. This is a multi-million dollar company in the media business, owned by a multi-billion dollar parent company.

My ideas would be:

1) My CEO becomes an angel investor.

2) I leave my job for 2-3 months so I can work on my startup, and they make it easy for me to come back if I fail (I don't think I will, so this isn't that important to me).

3) My company invests and becomes an small-percentage equity owner and lets me leave, happy to know that at least if my startup succeeds, they will be hundreds of thousands or millions richer.

I guess I don't have to work with them at all, but it seems like a 'blank check' or sorts that I would be silly to pass up. What would you ask for?

This is a fairly established startup with a few million unique users but no revenue as of yet (exploring a promising freemium model).

noodle4• 17 years ago

what if you went from a full-time employee to a contract/freelance worker at maybe 20 hrs/week? more time to work on the startup, and you'll still have a separate steady paycheck (edit: while you work on monetizing the startup).

ceoinvest9• 17 years ago

Good suggestion, I'll have to think about that.

Then again, the startup definitely has enough work to keep me busy full-time, and taking a 1/2 cut in pay to work 20 hrs a week on the startup is almost worse than going to $0 pay to go as fast as humanly possible.

noodle4• 17 years ago

why would you agree to a simple 1:1 ratio paycut to hours worked? minimally, you need to cover taxes, benefits, etc. that the company was covering previously, so your hourly rate should be higher from that. but since you're the one inconvenienced here, you should be asking for more on top of that.

eob• 17 years ago

Yeah -- single tasking is probably much, much better than trying to split between two companies at once.

I'd pursue getting the CEO as an angel investor. It provides you with money to build the business but attaches you to only one person instead of an entire company. If you are successful, you can always propose a larger investment or relationship with the existing company as a whole -- and by that point you know the CEO already has a hand in both pots, thus an incentive to facilitate that relationship for you.

pasbesoin2• 17 years ago

A thought: If they want you bad enough and you are in the U.S. or similar, make continued healthcare coverage and maybe some other benefits part of the negotiations, even if you go contract. (+)

Sabbatical? Some companies will offer/support that kind of a time off model.

Guard your IP.

+ I'm not certain this is possible, but I've heard sometimes vague descriptions of such arrangements. It seems to me that staying within a larger pool would be preferable to purchasing independently.

bdubz• 17 years ago

Are you implying that by giving up 20 hrs to your current employer, you'll only have 20 left for your startup? If you really think that your startup is going to be successful with you only committing to it 40 hours/wk (in the absence of contracting back to your current employer), you should reconsider your startup.

tsally• 17 years ago

If you go this route (and you definitely should) be sure to get yourself hired through your startup, so you can use your old company's logo and a quote from your boss on your PR page.

gojomo• 17 years ago

Is your startup in an area strategic to your current employer? That presents an opportunity for their formal support but also a risk -- are you certain they'd have no claims on the work you've already done?

ceoinvest9• 17 years ago

Yes, it is. They could offer a lot of promotion, but our biggest challenge right now isn't exposure, it's (no surprise) revenue.

thorax• 17 years ago

Exposure can be a catalyst for revenue (of course), so that does sound handy.

brk• 17 years ago

I could be wrong, but I doubt he has any desire to invest in your business (and if he doesn't meet accredited investor requirements, you might not be able to legally pull it together anyway).

More likely, he does not want to deal with backfilling your positions and training a new person.

The probability is that he is being selfish, not helpful to you. I would look for some sort of work-from-home or part-time arrangement. Let them "fund" your startup by allowing you to keep a portion of your paycheck, not by actual investing.

Don't count on option 2, either. I've seen many cases where a "super critical" employee leaves with much concern, and 3 months later it's like they never even worked there.

I don't mean to sound negative, just realistic...

ceoinvest9• 17 years ago

The work from home or part-time arrangement sounds OK. He has already hinted at that. As someone else has said, I worry a bit about IP in that case (although I never signed any agreement with my employer).

graywh• 17 years ago

IANAL, but I don't know that you have to sign any kind of agreement other than you cashing your paychecks and them having a written policy stashed away somewhere.

boredguy8• 17 years ago

I'm pretty sure he means "work together to keep you here" not "work together on your new project".

Noodle's suggestion of offering to stay on as a consultant for less than 40 hours a week is probably the best suggestion.

Dilpil• 17 years ago

4) You ask your current employer to match the position and potential financial upside (with far less risk of course) you would be getting at the start up.

jgilliam• 17 years ago

I just went through this process myself. It can be tempting to structure some kind of part-time agreement, to continue to consult with your old company, but I didn't do it.

It took me 5 months to extract myself from my old company, I planned it out with the CEO and set a date. After that date, all I've done is answer the occasional question. Now I have complete focus on my startup, and it's been wonderful beyond even what I expected. It's unleashed a whole lot of creativity that was squashed at the old company because my ideas didn't really fit in with the company's direction. I'm totally loving it.

ceoinvest9• 17 years ago

That is some seriously encouraging commentary. Thanks.

Oxryly• 17 years ago

True dat. Although now you need to get someone to weigh in where the process backfired on them. Volunteers?

blender• 17 years ago

Chances are you will fail. Even if you do the right things.

Don't mean to be harsh but that's the statistical reality.

Cheers

ceoinvest9• 17 years ago

If you fail even by doing the right things, you are tragic, and I wouldn't call that a failure because I believe in rebirth.

Off-topic: what's your measure of success?

niyazpk• 17 years ago

"This is a fairly established startup with a few million unique users"

I cannot understand what is holding you back. Quit your job. No strings attached. Just go for it.

If you have a startup with a few million users and you don't quit your job, who will? This is a no-brainer. Take your chances. Take the plunge. It will turn out good.

HSO• 17 years ago

Oh I don't know. How is it "taking your chances" if "it will turn out good"? It may turn out bad, in fact, the unconditional odds are against him. Not to be a sourpuss, just being realistic. I think he is quite right to agonize a bit and think his options through for the event that it does not go well, even with millions of unique users. Good risk management...

tptacek• 17 years ago

This is pretty easy: switch from employment to 1099 contracting. Get a master services agreement in place with its own IP clause, which ensures you own your own product, services, and methodology work. An MSA should also establish your ability to subcontract work, or substitute any of your employees for yourself on projects.

Then get an up-front commit on a couple months worth of work.

You have now set yourself on a course to bootstrap the company off consulting work. Total win.

enra• 17 years ago

It's quite common that key persons(usually in management/business) stay as consultants for a while, like few months to few years, when they're leaving/boostrapping their own company. The company will have enough time to fill the position and train the new guy and the person leaving can keep stuff running and turn over accounts/information/contacts.

Try to negotiate somekind of new contract. It's good to get a solid contract, say for like 6months, which is renewable or terminated if both parties agree, so they can't drop you easily(you can have some income projections) but they cant keep you forever either, and you can terminate it if it doesn't work out.

gibsonf1• 17 years ago

I know of a similar case where the company continued to pay 75% of the person's salary and health coverage for half-time work. This worked out pretty well.

biohacker422• 17 years ago

ceoinvest9• 17 years ago

Do you know of any examples where this has been done?

biohacker422• 17 years ago

Actually I do and just can't think of them. But I know this is not that unusual.

PaulMorgan• 17 years ago

How about a retainer agreement? They purchase some of your time each month. This limits your time devoted to their concerns but could also be a distraction from the startup. The rest of your time is devoted to your startup with the retainer giving you more runway.

Any chance your current employer could become a paying customer? Starting off with a customer gives you credibility for capital and other customers.

ceoinvest9• 17 years ago

Retainer--that's not a bad idea. So they could potentially hire me out for X hours per month, and there would be an upper bound on X?

Any chance your current employer could become a paying customer?

Already are, actually.

xcombinator• 17 years ago

My advice: Get 100% on your startup or don't jump the ship.

Don't fire bridges with your last job-contacts. Keep your friends and be polite with your CEO but tell him you have taken a decision.

Factor Number 1 in a startup is time, if you continue working for your job, you lose a lot of more time in between. You need to be in the position of having only two options: 1-success or 2...success. You need to be hungry for success. Take money from people you know how they are.

flipper• 17 years ago

pg wrote about the risks of trying to consult and build a startup at the same time:

http://www.paulgraham.com/startupmistakes.html

Look at #18. It's what killed my startup.

I'm leaving my day job. But my CEO doesn't want me to leave.

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