Founders' conflicts destroy your professional reputation, and that's okay

This is what what I have learned

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Story

Thinking with emotions

I could not believe this was happening. My former cofounder’s past actions were still haunting the business. My team was not granted a chance to compete at all because of the mark a person who no longer wished to work alongside us and had left.

This was serious. One thing was to have a founders’ conflict which drained my physical and emotional energy, and a whole different thing was for my startup to be disqualified because of this conflict. This would affect my team, who did nothing to cause the conflict. This would affect our cashflow, even when we were still brave enough to face the unknown and say - we can do it and we will do it. Cashflow would in term affect the startup’s ability to pay our team - which would impact their lives directly.

“How has this happened?” - was a silent scream in my head until my rational mind took over the reins and analysed the situation.

Here is what happened

I and my former cofounder proudly became part of Casa do Impacto 1 year before this conflict concluded. Casa do Impacto was, and still is, the home of our brain baby, while doing much bigger things as helping and investing in social and environmental entrepreneurs from all over the world. We were one of the lucky ones :).

I and my former cofounder had parted way 3 months before our conflict concluded. I illustrated the conflict in facts in some previous posts of mine, the links to which are listed below in the section prequel so I am not going to touch on that now.

When the conflict had concluded already, my startup applied for a pitching competition - the 4th edition of Santa Casa Challene supported by Casa do Impacto. The area of impact this edition concentrated on was Chimate Action, inspired by the UN SDG 13 - Climate Change. Our works fell exactly within the scope of this challenge and we were already part of Casa do Impacto, which meant that we had a competitive advantage over the rest of the applicants. If we were accepted, we would get the chance to pitch alongside 9 other projects and compete for perks - like €15 000. That would be it - selected meant only that we would be given a chance to pitch. We did not get selected. These are the projects which got in - and I must say - congratulations. This is when I started asking myself - “How has this happened?”.

Thinking

To find the answer to this question, I needed to stop thinking with my heart and start thinking with my brain.

When a startup is going through founder problems, accelerators, cliens and future investors take a step back and wait. They wait not because they want no part of these problems, but because they want to see whether the startup continues existing after the conflict. Many startups die after the cofounders disagree on how to continue forward and the company gets closed. So from the point of view of these stakeholders, waiting is the way to find out whether the remaining founders have the strength to pull the startup from the pitfall in which it has fallen.

Let say that the remaining founders manage to bring life back to their startup. This is a great news and it requires a lot of grid and resilience. It takes months or years for this internal resilience to shine through and be seen by the outsiders - in this case the accelerators, clients and potential investors.

At the end, it is better for the stakeholders to invest in a strong team than a strong startup with no founders’ team to keep its success. This is why they wait.

I realized this. I am not saying that this is the best apporach stakeholders can adapt. What I am saying is that it is asafe option, and it is a good option. So I asked for feedback - and indeed the recent founders’ conflict was the main reason we were out.

This was good feedback as I knew what I needed to do. I had to continue my entrepreneural journey until the trust in my startup was regained and beyond that point of time. But most importantly, I needed to find a way to work with Casa do Impacto and show our drive. It would and will take some months.

My startup got accepted in the first stages of the Women 4 Climate program, in which Casa do Impacto is a partner. It is a sign of good will from their side to continue working with us and give us a chance to move forward in the program, and it is a chance for me and my team to show what we want to achieve and where we want to go. So there is a silver lining to this story.

Moral of the Story

Sometimes an event from your past professional life might affect your current professional reputation. In my case, a founders’ conflict would deem my startup too risky to enter for a competition ran by the entity who supported us whole heartedly for 1 year. This happened to us, this or something similar has happened to many others and it will continue happening. That’s okay. It is the path we have to take sometimes.

The way forward is to understand exactly what parts of your professional reputation got weakened, in front of who, and take action to strengthen these weak links.

More Thinking

Some of you might be at the beginning of your entrepreneural journey, and this might feel like wow. Others might already have had some successful exits, or lost tens of millions of euros to make hunderds of millions of euros. All of this is okay, as we all follow our individual journeys.

I am happy that when we needed to fall and take a hit, we were still small so when we lost, we did not lose big. Still, I cherish very much the business lesson I have learned, and I am excited to see what comes next. Some good and some trouble - this is for sure!

Prequel

Read the four-part story of my startup, which here:

  1. Dream
  2. Success
  3. Horror
  4. Drive and Thank you