Tuesday, February 20, 2007

Preface everything with "Going forward . . ."

Everyone knows that the past, even when instructive, is the past. But can be hard not to dwell on it.

For the last couple of years I have been a shareholder proxy for a small, private biotech company in the Seattle area. The company is 15 years old, and was launched with a relatively small angel investment (I'm just glad it's not 25 years old at the bottom of $700M hole).

Staying in business for so long and generating a decent amount of sales without taking in any more money is no mean feat. Some might even call it a success - where Some = the entrepreneur.

A few characteristics of the original incorporation have made it relatively easy for the entrepreneur to operate the company as a bit of a lifestyle business.

To make matters worse, communication between the investors and the entrepreneur has been chronically poor, from time to time, vitriolic.

However, over the last year, time has begun to align incentives. The entrepreneur, now 60 years old, has started to think about retirement, or at least, semi-retirement. He is looking for an exit. Coincidentally, an exit also appeals to the investor group.

Old resentments do die hard, and even recently, the odd nasty letter has been sent. Having not been involved since inception, I personally am better able to look ahead - and - going forward - I think things might just work out okay.

Long story short, if you can't say 'Starting from here . . .' or 'Going forward . . .' it's probably not that constructive.

***UPDATE*** Fred Wilson has just written one of his best posts ever, on patience, and it is closely related.

Being largely inexperienced, I have found Brad Feld's Board of Directors Series to be enormously helpful, because corporate governance can get really, really weird.

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