Saks Does Not Take Restricted Stock
It’s no secret that a good founder team is an essential step for a successful startup venture. You hope that your co-founder has the mental toughness to stay strong through the bootstrapping process where short-term milestones typically go unrecognized and bank accounts dwindle. But what about your co-founder’s wife, husband, girlfriend or boyfriend?
Your Partner’s Partner
While it’s difficult for your co-founder to maintain course, it’s even more challenging for your co-founder’s significant other to continue “believing in the dream” and remain on board with the startup because:
(1) No matter how many times your co-founder explains it, the significant other can’t visualize the startup’s concept and/or monetization strategy;
(2) Like you, your co-founder is smart and can probably seek out and land a “real, paying job” (the significant other’s words, not mine); and
(3) During your startup’s bootstrapping period, 4,000,000 shares of your startup’s restricted stock won’t purchase that Prada Soft Calfskin Leather Satchel at Saks , or more importantly, put food on the table.
End of the Beginning
Your co-founder can only say “we’re almost there” so many times before his or her significant other gets restless and pressures your co-founder to find an immediate-cash-flow-positive opportunity. Once this occurs, it’s likely only a matter of time before your co-founder does.
Even if your startup put its founders on a vesting schedule, the loss of momentum from losing a co-founder can still be painful. While you can try to poach a founder from the 37signals Job Board, it won’t be a quick recovery. If you lose a portion of the team you can’t replace in a timely manner, the startup may be over.
I’m not suggesting startups should run background checks on prospective founders’ significant others. Rather, co-founders should simply realize that their partner’s partner matters.
And if your startup has significant others that stay on board, thank them. Repeatedly.