A Simple Tale: To found or not to found
How I got the best advice of my life
I had another thing to go to, so Josh and I took different routes coming back from the meeting with Albert. We agreed to meet back at his home in Brooklyn (we’d been working from his basement office as we put our pitch deck together). I picked up a bottle of Champagne1 on the way over, and Josh and I sat down on his sofa and opened it.
We were both a little surprised. It seemed almost too easy - first VC we pitch wants to fund us? When does that ever happen? Up until then, this was just an idea we were both excited about. Josh still had a bunch of consulting clients he was working with, and I had a bunch of companies that I was interviewing with in the US. But if one of the best VCs in New York was going to fund us, then this was going to become real. We’d have to quit full-time jobs, fire clients, and focus 100% on this idea of building a retail bank if we were to have any hope for success.
“I want to be the CEO” said Josh.
I considered this for a moment. We hadn’t really talked about roles, operations, or any of that stuff. But this was Josh’ brainchild originally, and he’d pulled me in. And he was the one with the VC connections.
“I’m ok with that. I want to be CFO then.” I said.
“And what about the equity?” he said.
“50:50?” I hazarded.
“I should have more if I’m the CEO” he said. “Would you be ok with 60:40?”
“Alright”2 I said after a minute of thought. And that was that.
The best advice I ever got
I still had a few jobs I was interviewing for though. Paypal was easy - I wasn’t far in the process and it was easy enough to drop out. But I was in the final round of interviews to join Hewlett-Packard’s strategy team, and I was about to fly out to California to meet the team. I didn’t feel like I could drop out in good conscience right before I was supposed to meet them. I was also very much torn between taking a steady job, doing work that I knew very well how to do, versus an unknown and highly uncertain startup endeavor. I also needed to transfer my H1-b from McKinsey to somebody in order to move to NY and work in the US.
My wife made some money working for the World Bank, but it would be very hard to live just on her salary in NY. We’d definitely eat into our savings, and those would only last for so long. Also, healthcare was a big concern. We were still relatively young and healthy, but the thought of living in the US without healthcare was scary. We wanted to have kids too someday, and that would bring its own costs and concerns.
I had an offer letter from HP soon after I got back from the final interviews in CA. The salary was a little lower than I was hoping for, but it came with a $25k sign-on bonus, which was very nice. And of course, they would happily process my H1-b transfer and ensure that I could work in the US legally. A lot of the folks on the strategy team were ex-colleagues from McKinsey as well, so this would be a very familiar environment for me.
Yeah, I was torn.
After negotiating the offer from HP a little bit, I finally ended up talking to my potential future boss, the guy who ran the Strategy team.
“Look” I said. “I think the salary on this offer should be 10% higher, but thats not whats really bothering me here. I’ve been talking to my good buddy from business school about this startup idea. It’s super risky, but we can probably raise some funding for it. And I am really struggling to decide whether to take your offer, or go take the plunge on this startup”
“First off” he responded. “I think the offer is perfectly fair and reasonable. But lets put that aside for a minute. I’m an exec here at HP, and I’ve been on the strategy team for a few years. I’ll be on this team for a few more years, and then I’ll go run a division at HP. If I play my cards right, I’ll have a shot at CEO a few years after that. I have a wife, couple of kids, two cars, a house in the Bay Area. I couldn’t afford to do a startup today even if I wanted to. You are 30 years old, and you have none of those things. We hire 10-20 entry-level people from McKinsey, Bain, and BCG into this team every year. I’m not saying this job will be here for you next year, but if you got in once, you can probably get in again.”
I thought about that for a bit. Then I thanked him, and told him we didn’t need to discuss the salary any further. I walked out of there and officially sent him a turn-dwon a few days later. I’ve never met or spoken to him again, but he gave me the best advice of my life.
Dom Perignon if I remember right. Now I only buy champagne after a deal is closed!
I’ve always wondered what would have happened if I’d held out for 55:45 or even 51:49.