CTO Quitting Immediately Before Bridge Financing Round – Bad or Anything to Do?

2 points by edana123 ↗ HN
I am 29 year CTO of a 25 person startup in a slow growth industry. We are pre-revenue but with a potential product and great support with strong previous raises. Think something like Pharma drug that require lot of testing. After going on a long vacation last month I realized: - I don't think the startup is going to ever have a big valuation, the best case is a long burn of many years to 50 millions. - I need to take a few months off and then switch to a low responsibility job. I am burnt out. I have been in this role for 3 years. I haven't been making enough money (although not terrible). I haven't been doing well in my job for 6 months now.

The thing is that we're about to do a bridge financing round next month, something I haven't paid attention to until right now due to being so burnt out. We should easily raise it from pre-existing institutional investors, according to the CEO. We still have a good amount of runway left.

I am scared that quitting now, right before the round, could put in danger the entire company. We pass the bus test at the tech level, but I'm not sure of the impacts on investors that me quitting could have. There are two individuals who could be interim CTO.

I am also scared that waiting until the round closes, optimistically 3-4 months and realistically 4-6 months, could have a serious negative impact on my mental health. I also want and need to go do other things with my 20s before responsibilities like children come along which should happen soon. Nevermind that 2-3 months after the bridge raise we're going to move right into series A raise so the situation doesn't necessarily even change...

The question: are there factors that I should be aware of to mitigate? Should I get a lawyer (too late for that before round is supposed to happen)? Anything I can do or avoid? Do I have to just wait it out? Can anyone recommend resources of someone to talk to?

Some other details - Bridge instead of series A is necessary for real reasons, no use arguing. - The plan has always been to replace me at Series A. That's already been delayed by a year. - I have mid-single digit stock options as an early employee with a long exercise window. I know there's many ways that these could be terminated. Is there something I can do about this? I am on good terms with 3.5/7 board members and the others are new.

4 comments

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Write off the stock options as a loss (at least until you can hire a lawyer)

Ask for 30-day paid leave of absense. You stay on during this time as an employee at your current role, so doesn't disrupt the financing.

IF they say Yes, then enter the agreement in good faith and be on standby during the 30 days. Maybe they'll end up wanting to extend the deal another 30 days. A the end of the 30 days, YOU decide whether to go back to your role or put in your 2 weeks.

IF they counter with lower pay during the leave of absense, then say OK but I want my stock options secured.

IF they fire you on the spot, then they deserve whatever pain they get.

Tell your team you intend to return to your role, but the writing will be on the wall.

Basically you're offering the company on-call transition consulting, in return for some extra vacation pay. Win win situation

hm very interesting thank you!!
In my experience, you should take care of yourself and stop worrying about the company. You've given them enough service. The company has to take care of itself now.