"Courage Capital", Quitting the Right Way, and How People React to BIG Money

When we raised money, I think one of the hardest parts was parts was trying to find where do we spend it, where we want to deploy that capital, and win.

We raised money from a position of strength. And we looked at it as incremental capital which our CEO Vlad came up with a term for - Courage Capital.

Courage Capital is the money you can use to take greater risks and place bets that you wouldn’t make otherwise.

-Ivan Makarov, VP of Finance at Webflow

You need to have your own board of directors or your career, people that can oversee your career growth, people you can go to advice, people that can challenge you. They should typically be more senior people.

And so every few years I handpick my own board. I don't necessarily tell the people, but these are in my mind, my board of directors.

I've always had a CFO coach. In fact, when I go into a new job, when I start interviewing for jobs, I negotiate it as part of my.

So I'm very lucky to work with Jim Cook, who's been my coach the past couple of years.

There's also the nice thing about going through the pandemic, we all built email networks. So I belong to several of them and participate actively where I can ask for advice and give advice on things that I've done.

I remember we were doing our tender offer for the first time, and I had never done a tender offer. Within just a few email clicks I was on the phone with somebody who's done it a few times and was telling me all of the traps, what not to do when you're doing a tender offer, and what to do.

When you start a new job and you build a team from scratch, your first three hires are your most important hires.

So you really gotta double down, triple down on the amount of effort you do sourcing the candidates, interviewing the candidates. You cannot settle, because these three people will make or break your success.

In the early days, hiring really kept me up a lot. I remember there were days when I would interview three, four people on the same day. And that was just not sustainable. Because every interview you do it just takes 150% out of you, and so it gets you really tired.

You cannot show up to an interview with low energy, because if you do, the candidate's gonna misinterpret that. And they’ll say that's not somebody I wanna work for.

I usually have to interview at least 30 people to get to the one. And I think every time we make a decision on whether to bring somebody to the next stage, or whether to extend an offer or not, this is a life changing experience for them.

So if you're not spending 50% of your time hiring, if you are able to hire, then you're probably not allocating your time correctly.

I remember at E&Y I went to one of the more senior partners in the office to tell him I was leaving. And I thought he was gonna tell me I was wrong and try to convince me to stay, and tell me how many people have made the mistake that I was about to make.

But instead he actually sat down with me and said,

“You know what? I'm very jealous. I'm too old now to leave. I've been here for 20 plus years and I make too much money to be able to leave. But I've always wanted to try to do what you're trying to do, which is the run finance department and be a CFO one day. And so you're living my dream. Go.”

And the other thing he told me was that I was always safe to come back. So when you're leaving on good terms, especially leaving a big company, they're always gonna welcome you back.

Once I heard that I felt risk free.

I think you have to de-risk. So if there's an opportunity, you take it. You never know when that next opportunity comes.

Some companies, in the good years, used to do secondary offerings almost every year, but those were very few companies. They had to be raising money often and also be one of those top five, top ten startups.

So at an average startup, those opportunities may only come once or twice, if that, while you are there. 

So if given the chance, you should take the chips off the table and maybe put them to use somewhere else. You never know when you're gonna need that emergency money, whether it's for health reasons or family reasons.

Valuations change. Yeah, there's likely an opportunity cost of selling at, let's say a $300 million valuation versus a billion dollar valuation. But in that moment I have to think about what's it today, and what could be tomorrow.

It's very possible to get rich selling too early.

It's impossible to get rich selling too late.

There've been a couple of nightmare stories of founders taking too much money and they absolutely ran the businesses into the ground. The founders just lost touch with the reality. And they were not motivated to keep growing those businesses when they could afford these $10 million, $20 million houses and multiple vacation homes.

Why keep trying hard when you know your bank account is set for the rest of your life?

But I don't think there's a right answer as to how much they should be able to take. Because we also don't know how people react to money.

I love listening to podcasts with some of the more successful founders that have seen multiple exits, and seeing whether it changed them. Tom from MySpace is a prime example - he completely disappeared after selling MySpace and hasn’t done another business. I think he's been traveling the world, doing things like photography and other pursuits.

And then you have serial founders like Stewart Butterfield at Slack, and he might do another one, who knows. People like that don't care so much about the money; they just want to be challenged.

I remember hearing Ryan Smith from Qualtrics say that he thought it was gonna be like some big seminal moment when the money lands in the bank account. They were at a party somewhere celebrating when they sold to SAP. And when the money landed, they all just kind of looked at each other, shrugged their shoulders, and said, ok let's get back to work. It was a moment, but it didn’t really change anything.