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founder compensation needs to be strategically reviewed
across 20+ years of investing, the number of times an investor proactively approached a founder about giving them more stock (or cash) comp: fewer than 5.
it's not usually malice (though sometimes it is just being very shortsighted). it's just never top of mind. so founders get progressively underpaid. equity fully vests. go-forward equity drops to literally zero. five years in, complex life, still being paid like ramen-in-a-dorm-room days.
nobody says anything until the founder reaches a breaking point. by then it's usually outrageous -- and sometimes it's too late. trust between founders and investors erode.
a CEO that does not feel supported is the most predictable way to lose an otherwise strong investment. this isn't a feel-good issue. it's asset protection.
the fix: make comp a standing annual board agenda item. and for seed funds that don't take traditional board seats -- being the trusted third party founders can call to navigate these conversations is one of the most valuable and overlooked things a GP can do to protect LP capital.
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