I Got Fired From the Company I Co-founded

Oh, and removed from the Board.

It was not a happy day in my life.

My other co-founders did it under the guise of a meeting to discuss a value for my stock, which our Shareholder's Agreement said they'd have the first right to purchase.

Stock purchases in privately-held companies are inherently problematic.

Going into the meeting, I was excited because I'd been asking to have this talk for months.

It was a perfect venue, too. One of those conference rooms at the local library that you can rent for free. This one had a stunning view of the Front Range in Colorado Springs.

If I wasn't so furious at the time, I might have noticed.

It was April, and I told the other principals/stockholders that I intended to leave back in December.

I told them that I wanted to pursue new opportunities.

The real reason is that one of my partners (who was independently wealthy) had convinced two of my partners (barely getting by) that it was somehow in their best financial interests not to accept an acquisition offer that we had received a few months earlier from a large, financially successful S&P 500 company.

This offer would have earned them each well over a million dollars and the same jobs and salaries at the new company. It would have given them options to keep working in their same roles--which several partners had complained about--or transfer to different divisions and take on new roles.

It would have made all of us millionaires.

It would have been the achievement of a goal we had talked about since launching our company eight years earlier.

I used to believe the money guy when he said, "We need to have financial control." I thought all of us meaning his partners, were part of that "we."

We were not.

Since we started, he had maintained sole financial control of the business. He provided most of the seed money, so maybe he felt that even though we were equal shareholders—five guys with 20%—he believed it was his business.

To get away with that behavior, he need only convince two other shareholders to follow suit. He had no problem doing that.

As the business became financially successful, he was paid back several times what he'd put in.

As soon as I told my partners I wanted to leave, everything changed. I was no longer part of the tribe. I was now on the outside of the inner circle. I should have expected as much but I didn't at the time.

On numerous occasions, I asked my partners to propose a fair value for my shares. Instead, they just deferred the conversation and stalled.

I eventually hired a lawyer to review the SHA and represent me. If I couldn't negotiate a price and terms with them, there would be an appraisal, a valuation, and the company would get several years to pay me.

I was more than willing to take less than the million+ dollars I would have received had the acquisition gone through.

Well, my meeting lasted about 20 minutes. Three of my partners were gleeful because they never discussed the value of my shares, told me to turn over my laptop, voted to have me removed as a Director. Then, with equal zest, they canned me.

Furious, disgusted, hurt, and wanting to hurt a few of them. That's how I left that meeting.

I spent almost eight months paying exorbitant lawyer fees and trying to get them to follow the terms of the SHA.

They dragged out the process as long as they could. The money guy fabricated a million-dollar loan (payable to him and his wife for interest and unpaid rent) against the business which lowered the appraisal.

We worked out of his basement. For the amount of money he claimed the company owed him, we could have built two brand-new offices and still saved thousands.

I received a fraction of what my shares were worth.

I felt like they had thoroughly fuc#%d me over.

Getting whacked created immediate financial problems for me. I lost my hundred thousand dollar a year job, I wouldn't receive any funds from the stock sale for another eight months, and I needed a job yesterday.

Fortunately, things turned around quickly. I found a great job with a challenging set of projects in a different industry. I've since worked for several great companies, learned a ton, and been rewarded financially.

Hate is an emotion I'm a black belt at holding onto. It took years, but I've long since forgiven my former partners. When I wish them success today, I genuinely mean it.

Leaving was the right move for me. There have been many tough times since then —COVID-19 and other setbacks—but I'm happier and more fulfilled than ever.

If you're involved in a startup or new business, especially if you're a shareholder, and someone tells you the importance of defining an exit strategy, best to listen.

Highly recommend walking through the exit process at least once a year so you have mutual agreement and a clear understanding of what it looks like before anyone needs to follow it.

Ganbatte kudasai!

#ExitStrategy #EntrepreneurLessons #LearningFromFailures