What You Feel: Lack of loyalty to the people that got you here

Perspective: Before you are properly funded, you need people that are willing to work for below-market compensation or for equity only.  These individuals provide the blood, sweat and tears that you do.

Unfortunately, your first employees may not end up being the senior leaders of the company.  This generally comes to light when third parties such as investors, board members or advisors take a look at your company.  This is the ultimate catch 22 for you.  Your loyalty to these people will often be in conflict with what is in the best interest of the business.  Your loyalty to them is admirable.  However, when third parties come in, if you support individuals that don’t possess the skills to run the business, they will question your ability to lead the company.  Moreover, if a third party comes in and suggests different leaders, these early employees will expect you to fight for them.  This issue often tugs at your heart.  You watch people toil with you and also know that as the company grows, they may not be the future leaders of the company.

How do you deal with this?  The bottom line is if they do not have the capabilities to run the business, putting them in those roles doesn’t solve the problem for you or the employee.  Third parties will quickly see if someone lacks the ability to run a piece of the business.  Fighting that fight is a losing battle .  The business will suffer.  Your judgment will be questioned.  The employees will fail.  However, these employees deserve your loyalty and have valuable legacy knowledge of the business.  To solve this issue, don’t focus on the role for these employees, but rather on the compensation package and guarantees to the individual.  Find a role that matches their skills and that helps the business.  Then, fight hard for a compensation package commensurate with someone that helped the business before it was a business.

You can say to third parties, “while we may agree that they cannot be a senior leaders of the company, they helped build the business and their loyalty should be rewarded.”  Some of the first people that enter the business are the ones that spill the blood, sweat and tears to make the business take life.  They sit side by side with you, day and night, to make the business happen.  Not taking care of these people sends bad messages.  First, that the people on whose backs the business was built don’t matter.  Second, that you are not willing to stand up to third parties such as investors when it comes to your people.  Both of these can undermine a culture.

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