First-Time Founder’s Beware; There Are Sharks in the Water

When you’re a bright-eyed and bushy-tailed founder experiencing early signs of success, you will attract all types of people.

Some will be good-hearted folks with genuine experience that can guide you.

But beware, there are sharks in the water and you need to avoid them at all costs.

I’ll never forget walking into his office — top floor boardroom overlooking downtown, brilliantly ordained with polished wood, and priceless art.

After exchanging pleasantries the meeting shifted to: I like what you’re doing, I can help you, give me a percentage of your company and together we’ll do great things.

The theme was clear: without me, you fail; with me, your dreams come true.

As a 20 something first-time founder hearing that, I was already picking out which supercar I would buy in my mind.

I pleaded with my co-founder to consider the offer, but cooler heads prevailed and we respectfully declined.

A couple weeks later we learned that friends of ours had received the SAME offer from the same ‘mentor’.

First-time founders beware, there is no silver bullet advisor, mentor, or board member, that can take you to the promise land.

Mentorship is not a transaction. It’s an act of service on behalf of the mentor.

Never give equity to someone you have received no value from.

Protect your equity at all costs.

Sure, if you’ve been working with them for some time and getting huge value, maybe consider compensating them with vested options over the long run.

But in the short run, beware, there are sharks in the water.

Trust your instincts, get a character reference, and always get a second and third opinion.