TennisandSales

Head Of Sales

Acclaimed Answer

"start up" -> corporate culture after VC money

I have had a few friends recently go through this and thought it would be a good discussion. The situation looks something like this:

Started working at a cool tech start up that is bootstraped or an older tech company that hadnt had massive VC funding.
culture is great, product is good, comp is solid.
VC funding comes it, new CFO, new VP sales, no VP marketing, expectations change and now everything is different.

My conversations with folks going through this is about what they should expect to happen.

You should expect that:

quota's go up
everything becomes more metric driven
raises are harder to get
leadership is micro managing more
leadership increases the price of the product.

These are not all bad things, they can be annoying, but not a reason to totally jump ship.

The main reason to NOT jump ship is because this is the path that most companies WANT to take at some point. if you leave when this happens ppl will totally get it, but may not agree because the new company you want to go to has ether gone through this, or WANTS to go through this in the future.

now you are not a long term fit.

curious on ppls experience with this.

☁️ Software Tech

✌️ Growing Pains

😇 vc investment

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13 comments

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saaskicker

Celebrated Contributor

3

Enterprise AE

to add to your expectations, change in comp plan. think this is appropriately labeled "growing pains". as sellers it pisses us off when things like this change, we see a world we do the same job/have same output and make less commission dollars. if you're a believer in the company and think the stock is worth it, good to stick around. also usually a good place to grow into a management position to work under (hopefully) seasoned folks and use that a spring board to your next job.

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

Agreed. With start ups - whether early stage or later on - they're not going to remain start ups forever. There's always a goal. Whether it's M&A or going public, there's some end state that the investors expect and the executives are aiming for. And with that goal in mind, scrutiny will be increased and there will be more visibility and pressure.
Good to call it out.

TennisandSales

Politicker

1

Head Of Sales

I use to view this as something to avoid if you loved the start up vibes, but the more i realize that all companies kind want this, you have to just embrace it.

I think if you can find success with the company once the VC money comes in, its easier to go to another start up and be the "ive helped companies make that transition" kinda person.

unclespacejam

Politicker

3

ur dad’s brother

My company is likely to go through this (bootstrapped company, cash flow positive and searching for potential buyers/ investors to clear cap table)

I own a little over 1%, and ideally want to stay to see through an exit on that stock.

Wondering what does that process actually look like, as in getting paid out, dilution, etc

Can you speak to that?

CuriousFox

WR Officer

3

🦊

👀🍿

unclespacejam

Politicker

1

ur dad’s brother

Yo for real @TennisandSales can you lend your knowledge?

TennisandSales

Politicker

1

Head Of Sales

Shit my bad homie!
There are a few things that are unknown
How many shares are there
How much would they sell for is also the biggest unknown
What type of stock do you own
Does the business have any debt that would need to be paid off.

I’d love to hear from ppl who went through this and have actually made money.

Most times individual contributors get screwed at the end when it comes to stock payouts.

unclespacejam

Politicker

2

ur dad’s brother

~2M shares total
Prob would sell for $100M?
Currently have fully vested options grant
Have a little debt, but no more than $50K

I wanna believe I won’t get fucked in the mix/ dilution, I’m the first employee hired in the biz

SgtAE

WR Officer

2

AE

Had this happen when i worked at Gitlab.
Typically what happens is the company needs to get "IPO ready" so the VC or PE firm investing has a retained executive staff who's sole job is to spend 18 months getting the company ready and nailing the IPO, they get a big bonus then move back to the bench for when the next opp is ready.
I watched 3 levels of management above me get fired in a single month, my manager, his manager, and her manager. I was for sure they we're going to nuke my entire team, my direct contact for me in Melbourne Australia as an SDR was a global VP in Canada
The one phrase that stuck with me was "the culture that got us to where we are, won't get us to where we need to be". And a lot of the managers represented the old culture, so they cut them and replaced them with new easier to mould leaders who we'rent part of the old guard.
Crazy times man

DungeonsNDemos

Big Shot

0

Rolling 20's all day

That sounds batshit crazy to go through

TennisandSales

Politicker

0

Head Of Sales

yes! that quote has been used so many times im sure! have a few friends going through this right now and their leadership is saying the same exact thing!

Justatitle

Big Shot

1

Account Executive

Usually pay gets worse too, when they get VC money and funding they aren't as hire needy as they once were.

TennisandSales

Politicker

1

Head Of Sales

I’ve seen this shirt over the years. Where they get Vc money then hire a bunch of reps to try and grow. But then when everything changed a few years ago the “grow at all cost” mentality seems to have shifted. So now i would agree that companies seem hire with more purpose even after VC money

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