FOUNDER LIQUIDITY IS IT THE RIGHT TIME TO TAKE SOME MONEY OFF THE TABLE?

• Author: Shelton, Robert
• Position: SILICON SLOPES

As a founder, you pour your heart and soul into a company. Your extreme clarity and hunger for success has brought your company much growth. You have taken that leap of faith from having a steady job to tackle the fear of starting up your own company headon. On a regular basis, you have put in disproportionate hours to salary to help your business thrive. The results you have seen are directly correlated to being laser-focused on bringing to pass the success of your company.

This level of success has not come easy. Not only have you made many sacrifices, but also your family (and especially your spouse) have made sacrifices. They have been there, patiently supporting ideas and dreams that you have had and witnessing them becoming a reality through a company. They have seen you take as little from the company as needed to allow the company to grow. You haven't taken very many raises over the years, but the personal financial demands on the family continue to grow.

The big question you ask yourself is, "Would it be OK to take some money off the table and seek out some founder liquidity?"

To understand the specific financial challenges associated with founder liquidity, we conducted indepth research with founders and their trusted advisors in Silicon Slopes. We selected each for his or her ability to provide valuable insights into founder liquidity issues they personally faced while competing in today's technology sector.

REASONS FOUNDERS MIGHT CONSIDER TAKING SOME MONEY OFF THE TABLE

Sid Krommenhoek, one extraordinary founder and now managing partner at Peak Ventures, has a very unique perspective--he's founded four startups, with two of those being very successful, and now he is on the investor side through venture capital. Krommenhoek provided great insights into why a founder may want to look at some liquidity.

"I've seen founders go from being single to married to having three kids in my time being invested with them. The demands on you financially grow with each year," he said.

Krommenhoek also talked about how successful founders can have great clarity and extreme focus on their business. But, he added, personal financial concerns can worry founders and distract from focus on the company. Some of these distractions can include the following:

* Sending your kid to the school that would be the best for them

* Buying a home that meets the needs of your family

* Living in a community that would be the best environment to raise your kids

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