Need a New Deal? Here’s How to Ask.

If your current deal sucks, here's specific path to take to insure you stand the best chance of a reset. [View this email in your browser]( • [Forward to a Friend]( How to Tell the Board "I Need a New Deal" TL;DR: "I've been working at my funded startup for a very long time and my current compensation sucks. My salary is way under the market and I have very little stock left. Is it possible for me to propose a New Deal for myself, and if so, how do I go about it?" Most funded Founders get to a point where their current deal sucks. It starts when we take (and keep) salaries well below market, then it extends as our position in the cap table gets crushed, and explodes when we're in Year 8 and nothing has improved. We now run a company that isn't good for us — and probably not good for investors either. So how do we propose a change in our deal when so much time has elapsed? Whatever we think our new terms should be, whether it's an increase in base salary, a cut of the profits, or an increase in our stock position, what matters is how we propose it. There's a specific path we need to take to insure we stand the best chance of a reset. Today’s Advice Sponsored by [Zendesk]( Make it a Binary Decision When it comes time to present our "New Deal" we have to go all in. We can't present it as "I'd kinda sorta like things to be different..." because if the Board thinks this is simply a nice to have, they won't act. Instead, we have to make it a totally binary decision — "Either I get this, or I walk." That doesn't mean we have to be a jerk about it, and we certainly don't need to use those exact words, but that absolutely needs to be the takeaway. If we don't make the decision binary and infer actual consequences, there's no real incentive for the Board to react. Conversely, if we lay down the hammer and make it clear that we need this new deal or we won't be around any longer, the Board is forced to make a move. What we need is a firm response in a short period of time, not a long, protracted discussion that continues to leave us in limbo. Start with the Friendlies Every Board is made up of what I call "Friendlies." Those are the people on the Board who are more likely to support our cause because they generally support us. We want to open the conversation with them first, in a private, one-on-one setting. There we will explain our situation, how the current deal is no longer working for us, and how we propose to change it. The nice thing about starting with a “friendly” is that it gives us an external view of how our proposal might be received. Think of it like a scrimmage for the big game. More importantly, we want to start stacking allies on the Board so that as we approach each consecutive Board member, we can build on the support of the previous member. It's a whole lot easier to convince our 4th Board member to support us when there are 3 of the 5 votes already in our favor. Don't Propose in a Board Meeting By the time we would present this officially at a Board meeting, we should have long since resolved the major issues. No one in the Board meeting should be unaware that this will be proposed because we should have been doing our legwork with each Board member ahead of time. The last thing we want is one or two Board members who are hearing this for the first time and feel ambushed by the proposal. There's often at least one person who is absolutely not on board or at least has some serious issues, but by this point, they should be outvoted by the majority anyway. None of this guarantees our outcome, but the process helps smooth out what could be a life-changing outcome for us as the incumbent CEO. We want the Board to know we approached this honestly and with as much tact as possible. Even if they don't support us, it won't be because of our approach. And if they do support us, it'll be because we made the process 100x easier. [Read More Here]( Founders: Zendesk wants to give your startup 6 Months of Support Tools for Free "How can we cancel?" ~ Nearly Churned Customer 😔 We have partnered with [Zendesk]( for Startups to help you see fewer emails like this 😜 Zendesk is the gold standard for customer support software and has been used by 15,000+ 🚀startups including a few former ones like Zoom, Slack, Airbnb, Uber, etc. You can “hack” growth, but please don’t “hack” customer experience… Zendesk’s service-first CRM makes it possible to create, handle, and track customer service tickets across phone, chat, email, social media, and any other channel you can imagine — and all from one place. Because it’s built to scale, it’s the perfect fit for startups and enterprises alike. [Right now, Zendesk is offering]( Startups.com users 6 months for free. Zendesk’s support, sales, and customer engagement software are quick to implement and easily scale to meet changing needs. With Zendesk, it takes hours—not weeks—to get up and running. In Case You Missed It [How Much to Pay Yourself.]( As a Founder, how do you determine how much to pay yourself? How much is too much or too little? We’re breaking down the long-debated issue of Founder compensation to help you find the right balance. [My Startup is Worth Millions. Why am I Broke?]( It's not uncommon for Founders to have all of their net worth tied up in their company without a real dollar to show for it. Our startup might be worth millions on paper, but is there a way to turn it into real money? [How Do I Get More Equity Back?]( Giving equity away is easy. Getting it back is super hard. So while we can get some stock back into our coffers, we have to focus more on how quickly we give it away than how we get it back. Love this topic? Hate it? Let's chat on social media! Wil Schroter Founder & CEO @ Startups.com [Share]( [Share]( [Tweet]( [Tweet]( [Forward]( [Forward]( Copyright © 2023 Startups.com, All rights reserved. You are receiving this email because you joined Startups.com. Our mailing address is: Startups.com 1201 Dublin RoadColumbus, OH 43215 [Add us to your address book]( Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](.