Why Are Most Founders Fired?

75% of founders are fired from the companies that they started. Elon Musk, Steve Jobs, Travis Kalanick, and Peter Thiel were all fired from the companies they started. This happens because their board of directors fired them. So why even have a board of directors? The answer is, because they raised capital from investors. Let me explain. When you start your company and need capital to build it, you're generally going to go to a venture capitalist for that money. And if they choose to give you that money, they will do it with a number of terms - one of the most important will be that they want a seat on the board. And if you were giving me millions of dollars, you would want a seat on my board as well. The issue arises when a founder raises more and more money. And as they take multiple rounds of funding, investors will generally require a seat each round. So very quickly, the founder is outvoted on their own board. And the core issue is this: Founders want to build a great company. Investors want a great financial outcome. And many times, these two items can compete with one another. And, a board doesn’t need a reason to fire a founder. 49 states in the US are at will. At my first company, I was fired after 10 years by email. This happens every day. At my second company, I built a set of controls that prevents founders from being easily disposed of, including an irrevocable board seat for founders, a more balanced board so investors cannot outvote you so quickly, and more. If you’re a prospective founder and are interested in implementing these controls, click "incorporate" on my bio and I will share more. If you're looking to incorporate, go to the link in my profile and click "incorporate," and I would be happy to guide you through this process with the controls I discuss in my videos. #founder #incorporating #fundraising #foundertok #startup