investment, founder, ceo, sharesIn our startup a university professor with his wife have the majority of shares. This professor is the CEO but he is never present in the company because he works at the university. The other shares are mine and of another partner. I think that this is the greatest limitation for the investors, what do you think?
Why would this be a limitation to investors? It isn’t at all unusual for startup companies to bring in someone as a figurehead with a fancy title because it can lend more credibility to a project than if all of the founders were unknowns. That figurehead may not contribute anything more to the project than their own notoriety as a way of showing that the idea behind the startup is solid enough to attract someone who is known.
Second, what’s the reason why he has so many of the shares compared to you and the other founders? There has to be something, such as him making an outsized financial contribution compared to the rest of you, or something that was the reasoning for all of you to agree to this in the first place.
The point is, if having this professor on board gives the company credibility that it wouldn’t otherwise have then maybe you’re getting all you can really expect out of the deal. Do you really need this guy hanging around, or does the team you have execute the plan well enough on its own? If the latter’s the case then you’re not losing anything by the professor not being in the office very often.
Another point is what someone else already raised – what was the agreement as to the duties of the founding partners when the company was formed? Is the professor not doing what he agreed to? And if that’s the case, were there any clauses or provisions in the founders’ documents to address non-performance penalties? This could be a flaw in your agreement that he is simply taking advantage of, in which case you have a bit of a tricky problem on your hands.
The short answer would seem to be, if no agreements are being breached, then as you’re talking about the majority shareholders, that’s just how it is.
If the company goes out looking for investors, that process very commonly includes detailed consideration of the contribution and roles of founders. For startups with academic founders, it’s usual to work within the constraints of those dual roles. But my guess is that any business plan taken to prospective investors would include funding for a new and more directly engaged CEO, accountable for delivering on the plan.
If there’s no plan to seek investment, your only legitimate question is whether there’s a path from where you are today to the success you are working for. If it’s yes, focus on that (and there are plenty of academic-led startups that work as you’ve described). If it’s no, you need to begin a conversation with the CEO (and there are plenty of people who’ve found themselves part of a hobby project dressed up as a start-up).
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