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What next for founders seeking their next adventure: Launch, Get a Job, Invest, Consult?

Hey, founders between gigs: What now?

If you exited your last company for airplane money and are now independently wealthy, congratulations! If you want to build another company, just self-fund. If you want outside capital, VCs will chase after you to invest. 

Unfortunately, most founders are not in that position: 9 out of 10 startups fail. Even if you achieve a high valuation, you might end up like FanDuel’s founders: their investors got the benefit of a $465m exit; the founders got zero.  

As someone with “founder” on your resume, you have an extra challenge in getting a traditional salaried job. You’ve already shown that you really want to lead a company and not just rise up the ladder, which means some employers are less likely to hire you. One research paper found, 

“[F]ormer founders receive fewer callbacks than non-founders; however, all founders are not disadvantaged similarly. Former founders of successful ventures receive even fewer [emphasis added] callbacks than former founders of failed ventures. Through 20 interviews with technical recruiters, we highlight the mechanisms driving this founder-experience discount: concerns related to the applicant’s capability and ability to fit into and remain committed to the wage employment and the hiring firm.”

At my prior firm, ff Venture Capital, we invested in a company co-founded by Nate Jenkins, who had a successful exit, but not quite enough to buy a private plane. He’s now researching his next opportunity and interviewing for some jobs. At the end of a recent interview, the interviewer summarized,  “I’ll hire you, but is this what you really want to do?”  That said, Samuel Sabin, CEO of HireBlue, observed: “Some founders who work better with more resources at their disposal may be tapped for intrapreneurship roles. Also, some companies value a self-starter mentality.”

So what should you do?  Especially if your life partner and/or bank account are burnt out on the income volatility of startups? 

I’ve been in this situation myself, when I shut down one startup, and when I exited two others. I suggest you have 6 main options: 

Full-time Initiatives

  1. Launch a new company
  2. Get a job

Part-time Activities

  1. Angel Investing, Venture Capital, and Mentoring
  2. Consulting
  3. Sell Information Products
  4. Education and Self-improvement

At Versatile VC, our new VC fund, we’re creating an online community just for founders who are in transition, Founders’ Next Move. We hope you will join us!

FULL-TIME INITIATIVES

1. Launch a new company

If you want to work on your startup idea, the bar for starting a company should always be very high. VCs have a diversified portfolio and most of their investments die; you don’t have a diverse portfolio and so you’re taking far more risk than the VCs. 

For free resources to help research your ideas, see What startup will you build? Identifying market white space

Some ideas to improve your search process: 

  • Join a specialized community for founders in transition, e.g., Versatile VC’s Founders’ Next Move; Cambrian Cofounder Matching (Fintech focus); Y Combinator Startup School Co-Founder Matching Platform; CoFoundersLab; Founders Nation (Israeli focus); Reddit’s Cofounders community; FounderFit Lounge, On Deck Founders; Second Time Founders. Many generalist online communities also have verticals focused on entrepreneurship, e.g., LunchClub or Meetup. See Should you co-found a company with your friend? And how do you split the equity?
  • Talk with VCs in your space. Many VCs keep a list of ideas they think have high potential. Versatile VC posts publicly our list of startup ideas we want to fund
  • Work at a “Talent Investor”. Antler and Entrepreneur First both pay people a small stipend (~$2K/month) to iterate on and develop a fundable startup idea, and invest in the most promising ones. According to Vegard Medbo, co-founder and Chief Commercial Officer, Antler, “60% of those that join Antler are second-time or serial entrepreneurs, and many of the rest have been early employees at successful startups. They are looking for strong, like-minded people to join them.”
  • Partner with a VC which has a formal program to support individuals who have not yet founded a company, but likely will in the future. Although the role is constantly evolving, VC Entrepreneurs in Residence are usually previously successful entrepreneurs who are building a startup leveraging the VC’s support. In addition, they may have responsibilities to support existing portfolio companies and/or evaluate potential deals. Many EIRs are compensated with zero income until they found a company, but there are some who are earning a retainer typically in the range of $90,000 to $150,000. Contrary Capital’s Talent program focuses on recent university graduates who are either founders or are likely talent for top tech companies. NFX has a formal group for Second Time Founders. Notation Moonlight is a community of tech leaders who are considering building a company. Afore Capital runs Zt1 and Human Capital runs Humans in the Wild, both accelerator programs with no equity or cash component. At Versatile VC, we currently host one Entrepreneur in Residence and are glad to hear from others.  
  • Work as a VC Scout. Some VCs have formal “Scout” programs to compensate people for sourcing investments. Compensation for Scouts generally involves receiving a fixed fee and/or a percentage of returns for deals that go through, but no guaranteed compensation. For example, Jason Calacanis shares in his book Angel the compensation structure for Sequoia’s Scout program: 45% of returns are given to the Scout, 50% to Sequoia, and the remaining 5% to a bonus pool for other Scouts in the program. Jai Malik, Venture Partner at Republic and ex-corporate Scout for Tata Communications, shares advice on becoming a Scout: “I think the most important thing they saw was that I was open to learning whatever it took to get the job done. I think that’s pretty standard with other positions. How well you can show that you are committed to what you want to achieve.” Among the other firms with scout programs: Accel, Chapter One, Village Global, KPCB, Contrary Capital, University Growth Fund, New Stack Ventures, Lightspeed, Atento Capital, BackedVC, Harlem Capital, and Index. Versatile VC’s Venture Partners act as scouts (in addition to other responsibilities).
  • Pay a small fee to a neutral company like Day One, OnDeck, or TackleBox to help you refine and validate your startup idea. Feedback.vc is a panel of VCs who will give you feedback. 
  • Work with a venture studio. Marco Franzoni, Managing Partner, Disruptive Labs, observes: “If you are an early stage founder looking to build a product or scale faster, Venture Studios can be a great option. For pre-seed companies, we invest and act as co-founders while for post-seed companies, we act as early-employees and specifically focus on company growth. That ensures you bring in experienced partners, with vested interest and a huge network of mentors and investors that can help along the way.”  10.10.10, a project of Colorado Nonprofit Development Center, “hosts programs that bring 10 successful entrepreneurs together for 10 days to confront 10 Wicked Problems, with the goal of inspiring new ventures based on new products or services that can solve one or more of the Wicked Problems.” See The 300* Startups Studios Taking on the World. 
  • Partner with a software development shop. To get yourself off the ground, consider working with some of the software development shops which are willing to take equity as payment; see Should you co-found your company with a software development shop?

2. Get a job

Ted Ko, lead on digital product at ROOM in Soho, transitioned from being CEO of a startup that didn’t work out to taking a job. He observed, “Having been in a founder role, it was difficult for me to surface conversations at first. I’ve had to really shift my resume/LinkedIn to going back to a specialized Designer (not generalized) role. Once I did that, it seemed like conversations and intros were starting to stick.” 

Some paths to find the right job: 

  • Join an established enterprise. Vegard Medbo observed, “We see that many of those that join large corporates (as the paychecks can be very attractive and corporates are desperately looking for entrepreneurial people to help them transform) quickly look for other alternatives. The pace is slower; they’re often restricted on what they can get through vs. what they are used to; and there is often more politics, which can take the passion out of someone who is motivated by innovating and bringing change. So choose carefully which corporate you decide to join and do thorough diligence.“
  • Join a startup. I suggest start by reviewing the portfolios of established VCs, e.g., HOF Capital, ff Venture Capital, for portfolio companies that are hiring and value your entrepreneurial experience. A few people offer curated lists of companies which are likely particularly good places to build your career, e.g., the Wealthfront Career-Launching Companies List
  • Go to startup Demo Days, a convenient opportunity to learn about firms in your space that are actively hiring. 
  • Go to AngelList and Crunchbase and look for teams working on issues similar to your area of expertise. If you love the team and traction, you can pitch them to join them as an advisor or cofounder. 
  • Hire a talent agent for business people, e.g., FreeAgency.com or Labtuit. These are the equivalent of CAA for movie stars. You contract to pay them a percentage of your first-year compensation, at no fixed cost to you. They help you find the employer who will pay you the most. 
  • Hire a negotiating agent. Negotiation of compensation only gets more complex as your career path becomes more unusual. You may find helpful Earner or RivaHQ, which specifically help you optimize your compensation structure. GetRaised helps you find out if you’re underpaid and get the right raise, for free.
  • Join a community of people seeking their next role. For example, Teal and Propel provide career services, community, and tools to help professionals in their careers. Founders.Careers is a platform focused on helping ex-founders find jobs.
  • Consider working in politics or advising NGOs. Major policy / political organizations of all stripes are looking to become more digitally savvy. If you tilt left, see The Democrats are Hiring and the Biden Administration’s openings. All Hands is a resume bank focused on tech talent that wants to work for progressive/liberal goals. Tech for Campaigns matches volunteers from the tech world — engineers, data scientists, product managers, marketing pros — with Democratic campaigns in need of a winning digital strategy. If you tilt right, see ConservativeJobs.com. InclusiveAmerica is a database of underrepresented people interested in serving in politically appointed positions. 

Further reading:

PART-TIME ACTIVITIES

3. Angel Investing, Venture Capital, and Mentoring

Will Stringer, CEO, Chisos, observes, “Talking with founders and doing diligence on companies from an investor point of view can be a great way to find your next problem to work on, or even network into a job at one of the companies you diligence.”  

Some ideas on how to become an active angel and potentially a VC:

4. Consulting

The simplest way to earn some income while you research your next move is to do some part-time consulting. M13 reported, “[T]he impact of relevant executive expertise [on a startup] is even greater than we had anticipated — to the tune of doubling the rate of return on a venture investment.” 

Some paths to win consulting work:

  • Join the major expert networks (e.g., AlphaSights, GLG, Guidepoint, Third Bridge), an easy way to earn extra part-time income for consulting by the hour, at no up-front cost. This effectively gives you a put option to sell your time to thousands of investors and corporates. It also is a hyper-efficient way to get paid to learn more about how large players see your space. Patrick Sullivan, CEO of Bonsai, emphasizes the importance of enriching your online biography with all possible relevant keywords, in order to maximize your odds of receiving requests to consult. Almost none of the expert networks charge you money to join their network; I would be very wary about the firms that want to charge you money to join their network. For a list of the major networks and more detail, see Earn more consulting revenue from expert networks
  • Join the relevant consultant networks. Particularly relevant is Startups.com, which helps startups identify consultants with relevant domain expertise. Also note Braintrust*, the first user-controlled talent network that connects organizations with highly skilled tech talent, who keep 100% of their market rate. Bolster specializes in working with growth tech companies.  A few, well-known networks include Business Talent Group, Catalant, Eden McCallum (focus on UK and the Netherlands), EIM, Eleven Canterbury, Expert360 (Australia), ForteOne, HighPoint Associates, Impact Executives (UK), SMA, Talmix (UK), Umbrex, and 10EQS. For additional, Europe-based Interim Service Providers, see the Institute of Interim Management Interim Management survey.
  • Affiliate with a private equity or VC firm in your space, as a board member, consultant, scout, EIR, operating partner, or full-time team member. At a minimum, it’s valuable to talk with leading VCs in your sector. VCs are always well-networked in their space, and they’ll have ideas on jobs or advisory roles. For an overview of all your options, see How operating executives can work with the private equity and venture capital industry. I also detail at that link how to win seats on boards of directors and how to partner with private equity funds to buy a company.
  • Become an advisor to one of the major consultancies. Some maintain a database of outside consultants (e.g., PwC’s Talent Exchange). Adham Abdelfattah, an Entrepreneur in Residence at Versatile VC and an advisor to the Senior Partners at McKinsey, said, “Familiarity with technology topics is extremely valuable to become an advisor for the top firms. Tech is their Achilles heel, and they’re always looking for seasoned talent that understands both technology and management to act as advisors. Basic networking (and even cold emails) with these firms can suffice if the person has relevant expertise. All it takes is 1-2 partners to want to onboard a person as an advisor once.” 
  • Affiliate with a specialty consultancy in your niche. There’s a huge world of smaller consultancies which work with outside, part-time consultants on an as-needed basis. It’s much easier to get on their “call list” than to get a full-time job. TheConsultingBench offers a database of over 600 consulting firms. 
  • Start your own consulting practice: Increasing numbers of professionals are making a long-term career as an independent consultant. See the Umbrex Guide to Setting Up Your Own Consulting Practice, by McKinsey alum Will Bachman. 
  • Offer career advice. A number of companies (Bonsai, Evisors, Rooftop Slushie) will pay you to share guidance with early-career professionals. 

Further reading:

5. Sell Information Products

Founders who are seeking extra income and/or visibility can efficiently do that by productizing their knowledge. This is also a forcing function to think about key learnings and crystalize them. 

  • Convert your expertise into a course or an ebook. Adham Abdelfattah said, “I believe Gumroad and Teachable are the best, since they have low fees and allow the creator to own their audience relationship. The trade-off is doing your own marketing which can be time-consuming, but in itself is a learning experience. Udemy offers a platform with organic traffic, but the trade-off is you do not own your audience relationship. My recommendation there is for the founder to focus on a topic they know well, cap the investment at a week or two of time, and publish something simple and unpolished. Example: I have personally found decent success so far with a course summarizing the consulting problem-solving method which has 381 students in 44 countries so far. Another very successful example is Daniel Vassalo, who left Amazon to start a new business and is funding himself through info products.“
  • Create a newsletter. “One can opt for an off the shelf solution like Substack, or a combination of Ghost (has an entire membership + newsletter stack). A great example of a newsletter writer in transition who succeeded is the story of Lenny’s (former Airbnb PM) Newsletter; he laid out his process here. Newsletters are also very useful for recruiting if the founder wants a job. They’re a resume with natural filters. For example, I just had an A16Z & Marc Benioff funded startup ask me to join as their CPO/COO after their founder read my newsletter. Of course, we had a lot of conversations too, but the discovery came through the newsletter.”

6. Reflection, Education, and Self-improvement

Suzanne Ley, Lead Business Development Manager, Lumen Digital Ventures, said, “I regularly tell people in transition to allocate some of their search time (~10-20%) to something that they have always wanted to do but may have been afraid to do or think is not ready for prime time. Many people will need to work for money now, but you never know what that small amount of time on your idea could result in over some period, and it may just give you the energy/motivation to live in the real world (and do the adulting thing like make money).”

Patrick Sullivan of Bonsai said, “Building a company is a slog, and often founders don’t allocate time to take care of yourself. When you have a chance, I really recommend you step back and make sure that you’re in good shape to take on your next challenge.”

Some ideas:

  • Now is a perfect opportunity to further your education. Columbia Business School’s Executive Ed program offers an expansive library of free, on-demand webinars. Fast Track is a mentorship program for First Round Capital team members, now open more broadly. Many universities have special free programs for alums. For more ideas, see Alternatives to College: Get Paid to Learn.
  • Join a university Accelerator/Entrepreneurship Center as a mentor, EIR, and/or guest lecturer. Many universities now have programs like this, and most are glad to work with people who didn’t happen to graduate from their particular program. 
  • Reflection. One founder emphasized the importance of taking time to reflect on your long term goals: “From my time building my startup, things moved so quickly that there was little time to think longer-term about what motivates you, what stage(s) of the company you enjoyed the most, what working dynamics do you thrive in, what really did you learn after years on the grind. That amount of reflection I find is important to finding the next longer-term opportunity, as opposed to hopping into something just to keep yourself busy (since we are so used to going 100mph 7 days a week).”

Further reading

Conclusion

Whatever path you pursue, even if it’s raising VC, it’s critical you fill out your Linkedin profile in detail. If you worked as a product manager at Google, you don’t need details; the job is widely understood. But as CEO of an unknown company (a company no one knows, even if you sold for $50m), it’s hard for outsiders to evaluate what you actually did. Michael Adler, Senior Managing Partner, AC Lion / ACLVP, emphasizes that in the text box under your name, you should be as descriptive as possible, as it is the first thing people see when they look at your profile. People make quick decisions on who you are based on how you describe yourself. For more on writing your resume and Linkedin, see How to Sell Your Professional Background.

Regardless, I hope you will join Founders’ Next Move, the community for founders in transition at Versatile VC.

Other career resources for founders in transition:

Thanks to Katherine Boe Heuck for research help, and also Emily Campbell, Esq., of The Campbell Firm PLLC; Michael Adler, Senior Managing Partner, AC Lion / ACLVP; Katie Weiss of SingleSprout; Will Bachman, CEO, Umbrex; Ha Duong; and Marco Franzoni, Managing Partner, Disruptive Labs, for feedback.

*Disclosure: I’m an investor in Braintrust and Republic via HOF Capital, where I was formerly a Managing Partner.  I previously posted this at Techcrunch.

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