The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:12:48 · Dev Ittycheria, Jason Lemkin
[00:12:48] S1: Yeah. So I just wanna be clear. I know Matane personally. I'm an angel investor, Sequoia's investor in Factory as well, and MongoDB is a partner with Cognition. But the fact that an adviser has access to a founder's confidential plans, there should be clarity on... You know, with with the founder that they're thinking about going in different direction, especially if that's a potentially competitive situation. But if I was the CEO, I'd be pretty annoyed to to see someone who had access to my plans go to a competitor. Again, I don't know if that had happened. That would be quite upsetting to me if it did. [00:13:22] S2: On the other side, like, as a CEO, you're... It's gonna be profoundly frustrating, right? Your advisor goes off and joins a competitor, right? It's happened to us all at some level. I would think 95% of the CROs we would talk to would say, this is fine, man. This is the way it works. Like CRO is a risky job. There's a lot of turnover, jobs come in fast and a lot of CROs, if it's a hot job, they move very quickly. And so I just think that a lot of CEOs would be frustrated. I think 95% of CROs would say this is how I found my last job.
00:13:22 · Jason Lemkin, Dev Ittycheria
[00:13:22] S2: On the other side, like, as a CEO, you're... It's gonna be profoundly frustrating, right? Your advisor goes off and joins a competitor, right? It's happened to us all at some level. I would think 95% of the CROs we would talk to would say, this is fine, man. This is the way it works. Like CRO is a risky job. There's a lot of turnover, jobs come in fast and a lot of CROs, if it's a hot job, they move very quickly. And so I just think that a lot of CEOs would be frustrated. I think 95% of CROs would say this is how I found my last job. [00:13:51] S1: Jason, I'm going to respectfully disagree because remember that CROs also hired other people to work for them, selling them on the company, selling them on the vision, selling them on how they're going to make money and how it's going to be transformative for their family. If that person were to leave, they basically burnt their reputation with everyone they recruited as well. So I've never seen a CRO flip from one competitor to another. I've seen a CRO go from one company to another company in a different space because they think that's a better opportunity, But I've never seen a CRO, at least that I can remember, that's ever flipped from, you know, one company to a direct competitor of another.
00:14:24 · Jason Lemkin
[00:14:24] S2: No. I just don't think most CROs, if they were just an adviser, not not a... I mean, he's not a full time employee. He's an adviser. He's not even on the board. A board observer. That's important, right? But there is a distinction between a board observer for a little while and a board member. A CRO, not a CTO, not a founder, not a CEO. Yet maybe somewhat retired as far as I understand it. You know, made a lot of money at Snowflake. That's fine. Nothing wrong for many for retiring. Gets what seems to be the greatest job offer. It's going to happen. And then says to the other CEO, I got this offer. I'm going to take it. It'd be nice if there was a little more temporal separation. But I just think most CROs that find the job of a lifetime that are just an adviser to another, they wouldn't even see a conflict. The way the way we think about conflicts as founders, I think a lot of CROs think of it as a game. Like competitors are often really friends with each other CROs. They see it all. My job's to beat Mongo. My job at Mongo is to beat whomever. And anyhow, I just thought founder is shocking, but I don't know if the CRO is an advisor. This is seen as crossing some sort of line.
00:15:24 · Dev Ittycheria
[00:15:24] S1: So again, not knowing all the facts, what I will tell you is that different advisors have different roles. So you can call an advisor for a particular part of the business or a particular function and say, Hey, I want your advice on, Hey, I'm looking to hire someone in Europe. Can you vet this person or give me some ideas of who I should talk to? That's very different than someone who's inside the tent looking at your product plans, your board plans, your financial plans, and has real visibility in terms of where you're taking the business. I think if it's the former, then yes, there's no issue. Hey, this person was talking to you. It was kind of a, you know, a light relationship and they decided to move on to a competitor. Okay. It happens. You're not thrilled about it, but it happens. But if someone had real insight into the business, real insight in terms of what the product roadmap was like, real insight on how they're competing and winning and losing against the competition, and then they suddenly jump to a competitor, that would be very, very different to me.
00:16:14 · Rory O'Driscoll, Harry Stebbings
[00:16:14] S0: The interesting thing is, if you think about the employee relationship first and then the advisor relationship, at the employee level, you know, if I'm... If I have a COO working for me, right, at any point in time, it's entirely possible that he can... He or she can get a compelling offer from a direct competitor and go over there and really know know everything about what I was doing up until the minute he gave his notice. And, Debbie, you might think, oh, that sucks. That was a pretty shitty thing to do because you were all in for team a, and now you didn't go to another sport. You went to team b in the in the same damn league. But it happens. And the factory CEO would, you know, voice anger. But it's worth pointing out, if I was a full time employee, there's no way for me to tell CEO A, hey, I'm thinking of leaving until I got the job, and then I have to get my notice. There's no halfway measure. So to some extent, this is going to happen. If you have employees, they're going to know a lot about what you're doing. And at any point in time, they can go and do the same thing for a competitor. And at that point in time, it's going to suck and write a bullet on the minute before they sign that offer from your competitor, they had no audio plans. So in other words, something shit like this can happen. [00:17:19] S3: If or you could forward communicate, you could say, Matane, I've been approached by Scott, and I would like to actually pursue it. And so I wanted to let you know, and be upfront about that, because I'm aware I have a position of sensitivity.
00:17:19 · Harry Stebbings, Rory O'Driscoll
[00:17:19] S3: If or you could forward communicate, you could say, Matane, I've been approached by Scott, and I would like to actually pursue it. And so I wanted to let you know, and be upfront about that, because I'm aware I have a position of sensitivity. [00:17:32] S0: Okay, first of all, I'm dividing a full time employee, and then we'll talk about advisors, because I think one thing that was corrected, there was implicit, this is where you get explicit and implicit understanding, there was a there was probably some implicit understanding about the advisor that wasn't fully fleshed out on either side, and that's why I think Deb is actually correct. But going back to the full time employer, I don't think you can, Harry. If your number two said to you, come in and said, Hey, I got an offer from Excel. I'm thinking about it. I may go, I may not. If not, I still want you to love me as if I'd never kind of thought about leaving, but I may go. And I've done that. But it's generally in an operating role, it can it can at least be difficult, at least half the time [00:18:12] S3: people that's are not the case here, Rory.