Add 'Getting Altmaned' to the Growing List of Concerns

BY WILL SWARTS

The leadership struggle at OpenAI appears finished, with founder and CEO Sam Altman back in the top job after a brief dismissal in November, but the lessons are reaching deep into the startup community.

Founders of companies are trying to reassert their clout after watching a Silicon Valley icon clash with his board and lose--and then win again, The Wall Street Journal reported. In an environment where the balance of power tilts to venture capitalists and investors, entrepreneurs are looking for protection for their companies and their own jobs.

That's made Eric Ries a busy man. The founder of the Long-Term Stock Exchange, a securities exchange for private and public companies, said his sideline in corporate governance and startup mentorship has taken off since the OpenAI fracas.

"My really niche, weird hobby suddenly became mainstream," he told the Journal. "All of a sudden, founders realized if this can happen to Sam, this can happen to anyone." 

Ries told the Journal he has a series of protections that founders can use to insulate themselves from board or investor attacks on their startups' management or purpose. He said creating supervoting shares or dual-class shares locks in founder control by giving them voting control. While investors aren't fans of multiple share classes, they've had to bow to the reality that entrepreneurs will seek protections as their companies reach the market.

The Journal spoke with Paul Yacoubian of Copy.ai, an OpenAI-powered copywriting and marketing software company. He said the Altman episode worried him.  

"For the first few days, I was most worried about whether OpenAI would keep functioning for us," Yacoubian told the paper. "After we got a bit out of that, my big question was, 'Am I going to get thrown out of my own company as CEO even if we're crushing it?'"

For founders who got dismissed before they could cash in, the OpenAI clash was an uncomfortable reminder. One such fired founder, Roger Beaman, called his exit from the first company he started the most "painful experience of my life." He set up more rigorous protections at his new company, Novel, which he founded in 2022. He set up protections for the Web3-commerce company that ensured he will get a year's worth of vesting if he is fired or the company is acquired.

Other founders are paying close attention to their leadership structures. Max Bregman, a 22-year-old co-founder of BreatheEV, a software maker focused on electric vehicle chargers, said he was taking a cautious view of how his board was composed.

"Someone on your board should have the best intentions for your company. They shouldn't be more worried about alliances with other board members," he told the Journal. "Setting the framework up now when not as much is at stake is important for the future."

Photo Credit: Getty Images.