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In a time where lots of people are announcing staff reductions left and right, it's a good time to talk about the most important aspects of dealing with the human element of reductions — Ego and Safety.

When I was a younger manager just learning how this all worked, I didn't understand the value of Ego and Safety. My "fires" turned into heated outbursts, crying, and grandstanding. I couldn't figure out what was going on and assumed these blowups were tied to the people I was letting go.

They weren't — it was entirely my fault. Even though I tried to be kind, I didn't appreciate that letting people go isn't about the transaction — it's about the person. How we manage that relationship is the transaction, and it always maps back to how we vie...

We all understand the "startup struggle" part of the process, but how does that other part, where we make a bunch of money work?

Doesn't it seem to be the case that there's endless lore about the early startup days and then the end where the company gets big, but not much clarity about what happens in between?

It's kind of like one of those "comeuppance" montage scenes (Wall Street's Bud Fox come-up is my personal favorite) that shows the time-lapse of the Founder struggling, and then all of a sudden on top with all the fancy things.

No One Sees it Coming

I've interviewed countless Founders of every possible industry who have "made it" and I always ask them the same question: "When did you realize you were about to be successful?"

They alwa...

About once a decade, the U.S. Financial Markets implode. It happened during the "Dot Com Bust" of 2001, again in the financial meltdown of 2007, and is now upon us in a Post-COVID recovery.

For Founders, while we understand the broader implications of "this is bad" we may not be aware of how it affects us personally now that we're running a startup in this environment. Fortunately, we have plenty of history to fall back.

What Just Happened?

In short, many of the tech IPOs that are the holy grail of startup investments have failed in an epic proportion. The reason that matters is that for startups, all of our fundraising is tied to the idea that someday there will be a massive pot of gold at the end of this journey.

Well, that pot of gold tu...

What would happen if we went straight up nuclear on the staff today?

That's right — a total hard reset. We burn the whole thing down and start all over again. We stomp out the politics, throw the dead weight overboard, and wipe the slate clean altogether.

Depending on how our day as a Founder is going, that might sound like our worst nightmare or pure heaven. But it's actually a very real question that Founders can and should contemplate, in good times and in bad.

For argument's sake, let's say that we were forced to shut down and let everyone go, but then managed to raise some capital to resuscitate the business and had a chance to do it all over again (we actually did this with Zirtual.com when we bought it, so it's not just mental exerci...

“I became an investor because I understand how to build businesses. It excites me. I enjoy the startup phases of businesses and enjoy being involved in many at the same time.” says Joanne Wilson, Angel Investor with 95 investments under her belt, otherwise known as “Gotham Gal”. This matches here credo — “Work hard and play hard.” Living in New York City, she is a self-professed foodie who also loves to cook and host and is always up on the latest cultural and fashion trends her city has to offer.

Joanne primarily invests in consumer based products and that covers a wide range with an emphasis on women and minority founders. “I have focused my thesis on female entrepreneurs — a decision that is more practical than philanthropic. She also w...

Yes, there are Founders who take personal money off the table during funding rounds, and no, you probably won't be one of them.

For the unfamiliar, there is in fact a practice whereby investors are sometimes willing to directly purchase shares from existing stockholders (like the Founders) in order to create some liquidity for them personally. It's called a "Secondary Sale" and it simply means the proceeds go to the Founder, not to the company proper.

The problem is most Founders just hear "investors will give me money personally" and assume it's a regular practice. It's not, at all, but it's also not something that's very well explained to Founders either. So, here's how this actually works.

When to Ask

A few things have to happen for us t...

I grew up with zero choices. As a broke kid with a single mom, I never really understood what people were talking about when they said they could "choose" how life worked for them. I just got used to being stuck with zero choices and dealing with the outcomes.

"Oh, you want to pay me 'ones of dollars' to mow your lawn? OK! I guess that’s what I have to do, because I need money."

Later on in life, I got to live this all over again as a broke startup Founder. No one presented me with an abundance of choices, I just took what I could get because I was constantly leveraged. Unfortunately, that runs a bit counter to the popular narrative we're hearing in startup culture, where we somehow have all the choices in the world and we're simply not ma...

Just because it's our startup doesn't mean we still have upside in it.

Anyone who's taken on a single round of capital and has suffered the painful dilution that comes with has had the first taste of "reduced upside." We accept it though, like taking awful medicine because we know it'll make things better in the end. But at some point that medicine stops working.

At some point, we look around and realize that our startup no longer provides the kind of upside for us we thought it would. It was easy to overlook when we could see us "making billions" but now reality has set in and we realize we just have a really stressful job that pays us way below market.

Call it What it is

First off, we have to call it what it is — a shitty deal. Is it a sh...

Sometimes the biggest financial startup success comes one paycheck at a time.

In our startup ecosystem, we've become infatuated with the concept that in order to be a successful startup we've got to have some massive IPO or sale. We sometimes forget that 99% of startups actually don't have that outcome and those people are buying Ferraris just the same.

The way most startups get rich isn't by that fairy tale exit (those are awesome BTW!) but by chipping away at growth and financial outcome over a longer period of time that gets them to the same outcome.

Digging a Hole vs. Building a Ladder

Imagine we've got two different paths toward creating our financial success. We're all pretty familiar with the first one, which is "digging a hole" beca...

Founders don't get the luxury of sharing openly — at least not without consequences.

Unfortunately, we learn this lesson the hard way, from acting and sharing like we used to do as an employee, only to find out that Founders don't get the same "safe space" we once enjoyed as employees.

Our startups are now a complex web of relationships, responsibilities and again, consequences that we need to understand and respect every time we're about to open our mouths about, well, anything.

It Wasn't Like This Before

When we were in our last job as an employee, we didn't really understand consequences the way we do now. If we got really pissed about something a co-worker did, we could hop on a Slack chat or if we were really clueless about this stuff,...