A startup story from hell

by mrfireflow. Posted on Sep 11, 2020    21    26


Startup-life can be really, really crazy at times. The story below happened to me recently. What's your thoughts on this, what would you do?

It's a long read, but here is a TLDR;

TLDR; Joined startup as co-founder, worked 6 months for equity only, fired for no cause, threatened with promises of violence if I didn't sign termination contract. Also had my reputation damaged when the CEO sent emails to my network stating I was a scammer and thief, in order to pressure me to sign the contract.

February

I was contacted by the CEO of a software startup, and asked to join the company as a Project/Product Manager and co-founder. The company was at this time without technical employees, and the development process had been at a standstill for several months since a contract with an agency had expired. My task was to restart the development process by hiring new developers and managing the development team. I joined because the product was really nice. A beautiful app I definitely would use myself. I also liked the drive of the founder. He had a strong CV as well.

I joined the startup on an "Independent Contractors Agreement", where I was told this was to test how our collaboration would work out. If I would be fired or quit in this period, I would have a right to compensation according to the hourly fee stated in the contract and the hours worked.

April

I join the startup officially as a co-founder with 12.5% equity and sign the Founders Agreement. Another co-founder also joined at this time. 1 year cliff, 48 months vesting.

June

The 3rd co-founder is fired since he didn't have time to work without pay, and I am sent a contract where I agree to that the 3rd co-founder leaves the company. There is also a point in this contract where I agree to let go of any financial claims related to the "Independent Contractors Agreement". In retrospect, it seems very strange that this point was added in connection with the firing of the 3rd co-founder. But I was cool with it at that point because we had an oral agreement from when I joined in February, where we agreed to forget about the independent contractors agreement and rather shorten my vesting schedule with a few months. So, the vesting was also changed at this point, reduced by 3 months.

A week later

After 60+ rigourous interviews, I hire 2 developers I am thrilled to work with. I know the CEO would never be able to find these people himself, he doesn't have both the technical nor the social skills to do that. Recruiting is hard in the first place, and it is even harder to recruit senior developers for equity only during Covid-19. So this was a major achievement, in my opinion. Turns out this achievement was the beginning of the end for me.

We have planned to start a 2-week sprint starting in the afternoon. Beforehand, I have been asked by the CEO to list the planned tickets in a form with time estimates from the developers. I told him several times this didn't make much sense, but that I would do it. I asked the developers to give me an estimate and have it ready by the start of the workday (they live in 2 different continents, so they start working in the afternoon local time). The reason I think it didn't make much sense is that the developers couldn't possibly give time estimates this early. They just joined and are not familiar with the codebase. We need to have a thorough discussion about the tickets before we start the sprint. In any case, this shouldn't be the CEOs business, I am the one managing the developers. But he is extremely micromanaging and distrusting in general, so this was common behaviour.

Around 14:00 the CEO asks me why the form with the time estimates is not yet updated, and I reply that the developers have not responded to me yet, but that he is not to worry, as the workday hasn't started yet, and we in any case will have to discuss the tickets with the developers when the meeting starts at 16:00. The CEO does not agree with me, and fires me on the spot, by saying "This is not working out, I will find another project manager" 

I immediately understand I will be leaving this company no matter what, as we can't continue from here. He is obviously a complete douchebag, and is basically firing me without good cause. I am supposed to get a 30-day warning in these cases according to our contract. So I respond quickly, and tell him I am leaving, while also mentioning how I think his leadership style is severely lacking, and other things I feel is dysfunctional in the company. I am polite though, and end it with saying I am sorry it had to end this way. The only response I get back is "thanks".

Following this, all the other employees in the company (3 of them who I recently recruited, in addition to the CTO), contacts me and say they are very surprised about the news, and share their sympathies with me.

My access to all accounts (Slack, email, Jira, etc) is revoked within 30-60 minutes after my chat with the CEO. Slack was also where we had our last chat, so I didn't even have time to save our chatlog. If I hadn't been working remotely, I am sure I would have been escorted out by security guards. I felt very disrespected. It also felt like this was planned ahead. I did my job, solved a problem, worked for free for 6 months, and got kicked out right after I recruited a backend dev who got the same amount of equity as me. So in essence the guy I recruited will get my equity.

Mid July

I am sent an termination contract, where it is claimed that I am terminated due to bad performance, and that I am therefore a "Bad leaver", meaning I have no rights to equity or compensation. I did not sign the contract, as I knew this was a lie.

I respond to the sent contract, that I am going to have a lawyer look at at it and that it may take some time. I was strongly considering taking legal action, but was on the fence due to not knowing how good a case I had. Also was exhausted after spending 6 months of my time on this for nothing, and wanted to enjoy my summer holiday. So I let him wait, as I think it's my right to get some time to think about this.

August

The CEO contacts me a few times and asks about the status on the contract, I give the same reply, that he will have to wait.

We agree on him coming by my apartment to pick up a phone the company bought me. He never shows up, despite having made 2 appointments with him. I think he doesn't have the guts to face me.

Late August

I am contacted again and asked about the contract. This time I told him I can't sign the contract as it stands. I gave him the option to send me another contract where it says I quit. I decided it was not worth more trouble, I am just going to close this chapter and move on with my life. A lawsuit would be time consuming and expensive. By this time I am also well involved with another startup, both receiving equity and salary, so I don't want more distractions.

KABOOM!

The CEO explodes in a raging fit and sends me threatening audio messages. I am told he and several others with "Russian connections" will come to my apartment to pick me up if I don't sign the contract, and "anything can happen, who knows". He even claims the angel investor is the one with Russian ties, and is the one I should fear. I can hardly believe my ears, this guy is batshit crazy. My wife got very upset by this, the rest of my family as well. (Note: I am in a Western European country)

He also threatened to send emails to people in my professional network. Which he ended up doing shortly after:

Later that day, I am contacted by people in my network, saying they have received messages from the CEO stating that I am not responding to emails and that they are looking for me - and that I have an iPhone that belongs to the company. I am, effectively, labeled as a thief and scammer.

I seize communication with the CEO at this point, as it is getting way too weird for me. He's clearly out of control. He later sends me screenshots of some conversations with people in my professional network, where he is telling them I have this phone and is not responding.

I am then contacted by the (interim) CTO/tech advisor in the company who apologizes profusely for this behaviour, and asks how we can proceed from here to solve the problem. He offers to mediate. I accept and tell him I want an apology and retractment sent to everyone who has received messages about me, as well as documentation of this. I also again request a contract that states I quit of my own free will. Even though I am clearly quitting due to force and threats, I don't want to have anything to do with the company, it is mentally exhausting. I have to say though, the CTO is a nice guy, I have nothing against anyone in the company except the CEO.

Last update:

September:

I still haven't received any documentation of the requested apologies and retractions sent to my professional network. I don't think it's going to happen due to his massive ego, therefore I have decided to file an injunction order against him, which will force him to send apologies/retractions to my network, as well as hindering him in sending further emails about me to people.

I am also considering reporting him to the police for the threats, but not sure.


Comments

Aditisingh123 1

What is the best way to start a startup business?

future-idiot-2020 1

Yikeeesss

Munluah 1

File a case against the person and submit a copy of it to your local court after you filed a complaint and threatening message to you. All this will be free with no need of lawyer. The judge of your local will advise you and give you a letter on how to settle this matter according to your local law. Once you submit the copy to the company it’s against them and your country law not you personally anymore. It’s under a civil right.

MrKansuler 2

Jesus, these kinds of experiences makes you grow though.

I had a very similar experience around 2016 (We might even talk about the same guy). I left after 8 months with a fallout similar to yours. Founders like this are truly destructive. I find joy in knowing that they're making themselves a huge disservice. Part of running a business is to be trustworthy.

The founder I had to deal with closed his business down 2 years later.

Now, I'm way more cautious if i come across a co-founder opportunity.

  mrfireflow 2

It definitely makes you grow, yes.


I thought I was being careful, though in hindsight I see that I ignored my intuition. He had "douchebag" vibes written all over him (too slick and not very authentic, showing signs of insecurity and a fake "alpha" attitude I could see right through). What probably lured me in was thinking that this company had a high chance of becoming a unicorn.


I get contacted regularly with co-founder opportunities, but I turn down 95% of them. Now I am going to become even more careful.

flyingwithelephants 1

Hey, I am sorry to hear about your experience, sounds really bad. Could I ask you how he actually found you? Were you reached out on LinkedIn? Is there anything you would now pay particular attention to about the people that contact you with a co-founder opportunity?

  mrfireflow 1

Thank you.

He found me on LinkedIn, yes. This guy had a long track record as a senior UI/UX designer for several large companies, including Coca-Cola and Volkswagen, so I felt pretty sure he was a serious guy. And he had great reviews on LinkedIn from former co-workers. However, this was his first startup, which is a very different thing than him being a freelance contractor.

On a personal level, this was not someone I would want to hang out with as a friend. For example, I meditate a lot and am interested in conscious leadership development and similar topics. Creating healthy work cultures is really important to me. This guy had no interest in that, and had pictures of Steve Jobs on his wall, which was his big idol. I guess I should have picked up on that. We discussed leadership and communication styles many times over these 6 months, I tried to teach him how important it was to be conscious and kind in all communications with employees and stakeholders. Because he would often be a bit harsh and stressed in the way he dealt with things.

The only way you can avoid something like this happen to you, is to trust your gut instinct. Your partner should be someone you really like to hang out with, and you should ideally have known them for a good while before you get seriously involved in a startup project. You want to know how they behave on bad days, and if they have integrity and morals/ethics.

MrKansuler 2

That's hilarious, the guy I had to deal with also looked up to Steve Jobs. What a coincidence...

flyingwithelephants 2

I see, there were red flags along the way... Thank you for sharing your experience and advice, I’m sure it will help many of us learn from all that. Hope you find a solution soon!

xeneks 2

sounds like hell

duscle 2

You are doing the right thing. I once worked with an asshole CEO too. Told him to go fuck himself and earn 8x what I used make. Right now I work for myself. I deleted linkedin. Free from the madness.

sous_vide_pizza 3

Gather all evidence you have and rinse him in the courts. I’m not sure how things work in your country, but in most places this sort of gross malpractice will at the very least get someone banned from holding any company directorship for a few years, the threats could quite easily be grounds for criminal charges here.

I’d take him to court, get your apology, get fair compensation, and get this man away from any position of power.

100% report him to the police, this guy is a menace.

Unic0rndream5 4

Man, sorry about this.

I run a small startup and I’m not a technical founder. I have a few devs and manage the projects myself.

We’re fully remote so we have short weekly check-in or progress calls.

I do ask for time estimates but they’ve been working on the application for a while so they can give reasonable time frames.

What I don’t do is micro manage. If someone is underperforming I try to understand why. If they can’t adjust, I let them go with my best wishes and look at it as a failing on my part. This has only happened a few times.

Your former CEO is out of line on so many levels. I say get rid of him and yes, take legal action because these kind of people don’t know when enough is enough.

  mrfireflow 1

Thank you for your support and advice.


I am definitely taking legal action, but there are so many different cases here, so I am not quite sure what I should move forward with. I also want some form of compensation. I want a settlement or some kind of payout, basically. That would feel karmically right to me.

prostartme 1

Legal action is only meaningful if they have money.

Blackout_AU 17

If you have documented threats against you I see zero reason not to take this to a lawyer.

Analyst-Suspicious 3

Why bother? Europe doesn't really do the whole US style "lawyer up and sue them" thing.

Just report them to the police and the prosecutor will handle it from there.

blueberrywalrus 1

The government handles civil remedy too, or is that not a thing?

Analyst-Suspicious 1

When a crime is involved, no it is not a thing. It's between the state and the perpetrator. Some minor crimes require the victim to clearly state that they want the perpetrator punished, but other than that it's none of the victim's business after the police report is filed.

The victim is not entitled to any compensation in the case of an illegal threat so asking for a settlement might end up with you getting a larger punishment than the guy that made the illegal threat.

Blackout_AU 2

I didn't say anything about suing them, OP has quite a lot of leverage here.

  mrfireflow 3

What do you think about using a lawyer as a middle man to negotiate a sort of settlement? With a promise of not reporting this to the police. It is a very clear case, so he will get a criminal record and possibly jail time if I file charges.

Analyst-Suspicious

It's a very clear case of extortion if you try to leverage it for a settlement.

Blackout_AU 2

Um what? Have you never heard of a civil settlement?

Blackout_AU 1

That's exactly why I said take it to a lawyer, not lodge a suit. You have more than enough evidence to make things difficult for the company, that gives you leverage to strike a favourable deal.

  mrfireflow 2

Oh, I see. I thought you meant a lawsuit. Then I definitely agree with you. I have already contacted a lawyer for the injunction order - but we didn't talk about making a settlement. I will bring that up with him later today.