They financed the company with credit card debt and were already doing $250,000-$500,000 a month in business when they finally got venture capital (after 70+ unsuccessful tries). However, they agreed to a forfeiture contract and a 4-year vesting period, and strongly advise everyone else not to do it that way.
They were so disgusted with the way they were treated that they sold off all their shares long ago. If they still held them, they'd each be worth about $24 billion today (they had 30% of the company, like the Google founders).
IF they were doing that much business, they shouldn't have taken venture capital--- but they, like most entreprenuers and people who get bad advice-- don't account for the real cost of venture capital.
That real cost is $24B in this case.
A quickly growing business can get funding from a variety of sources, many of which will take %6 payment, not require %600 and force you out of the business.
....but it sure is interesting to see all the different ways that VCs try to screw people-- re-vesting is something I saw in the past, and it didn't make sense to me then, but I have since come to understand just how asinine it is.
If you watch the video closely the story is a little different from that. The hired management forced Sandy out by threatening to quit en masse if she didn't leave. I got the impression that Don Valentine actually wished she could have stayed.
> If you watch the video closely the story is a little different from that.
I watched it several times. Your summary doesn't seem to conflict with my post... However, it also doesn't seem to quite fit what they said.
> The hired management forced Sandy out by threatening to quit en masse if she didn't leave.
Don Valentine:
"Seven vice presidents of Cisco Systems showed up in my office. We had a reasonably civil meeting in our conference room, the outcome of which was a very simple alternative: Either I relented -- and allowed the President to fire Sandy Lerner -- or they, all seven, would quit."
> I got the impression that Don Valentine actually wished she could have stayed.
Sandy Lerner:
"Don's opening words to me, you know, the first time I ever met that man -- I wouldn't have known him from the man on the Moon -- were, "I hear you're everything that's wrong with Cisco."
I didn't say they left in disgust, I said they sold their shares because of disgust with the way they were treated.
Yeah, you're right. I would be interested in hearing the other side of the story. Why would so many people be willing to risk their jobs to get rid of her? Either it was an impressive conspiracy or there were some real problems with how she behaved.
They financed the company with credit card debt and were already doing $250,000-$500,000 a month in business when they finally got venture capital (after 70+ unsuccessful tries). However, they agreed to a forfeiture contract and a 4-year vesting period, and strongly advise everyone else not to do it that way.
They were so disgusted with the way they were treated that they sold off all their shares long ago. If they still held them, they'd each be worth about $24 billion today (they had 30% of the company, like the Google founders).