Walking Away From An Exit
Why I Turned Down an Offer To Exit Our Startup
When I was an Associate in BigLaw, I started off in a litigation team. My first case to involved a wealthy Black engineer who had just bought a home in an upscale neighborhood. He was unhappy with a mold problem in 1 guest bathroom, and he was suing the seller for $3000, on a house he has bought for $450K. The legal fees alone were going to be more than the cost of fixing the mold damage, so I didn’t understand why he was pursuing this. I asked the Partner why the client would do this, and he responded “ Rich people litigate on principle. It’s not about the money, but he wants to make a point about what he finds unacceptable, as Black man — since he paid cash for this house.”
This statement went over my head, but it stayed in my soul.
When we started Anü, success for us was either raising capital, scaling and exiting with life changing money or increasing our skills so that we could reposition ourselves in a very competitive job market. I specifically wanted to move my career from law into Product Management. After our experience trying to raise a pre-seed round, which we downgraded to an angel round we made a call to quit raising and rather bootstrap to product market fit. In January we decided to find full time jobs and keep Anü as a nights and weekends activity. Max quickly landed a role in a great company and I put out a tweet to test the waters — to find out who would be interested in hiring a lawyer turned Product Manager.
The response was overwhelming.
I had so many people responding, retweeting, DM’ing — I felt humbled, grateful and excited about all the people who wanted to see me win. There was an offer that stood out the most from another legaltech company that presented an opportunity for an acquihire. Honestly, this was the most exciting offer because it allowed me to achieve the coveted title of an “exited founder”- which is a big deal as a Black, female, immigrant founder, get a steady paycheck, a company willing to sponsor my visa, continuing to build in a space where I have a lot of domain expertise and become a Product Manager.
Want to read this story later? Save it in Journal.
Perfect right? So, why did I turn it down?
- Personal Principle
When we started to discuss compensation and financial incentives, we quickly realized we were not on the same page. The offer did not reflect positively on the value I and Anü would be bringing to the company- from experience, networks, education and was far below market rates for that role. After looking at Glassdoor I saw the organizations upper limit for that role and they weren’t willing to increase my offer.
Anü is pre-revenue, so in ordinary M&A scenarios the purchase price is based on a multiple of the revenue, value of the technology (what it would cost the acquirer to build vs buy the technology), brand name, other IP, team and customers. In our case, we are so early that all these wouldn’t apply. It was really an offer to hire me, bringing my experience from Anü — including some parts they were interested in and closing Anü operations. The salary was lower than expected, there was no clear cash payment for my co-founder and there was an unwillingness to be creative around another arrangement — eg more equity, a signing bonus, etc. I was worried that it would be reflective of my time in the organization, if I needed resources for my product- would I get support? would it be a priority? would I be taken seriously? It just didn’t feel right.
In the same week as the discussions, Dr Ngozi Okonjo-Iweala was finally appointed as the Head of the World Trade Organization, as the first woman and African to take on this role. She is a Harvard grad, holds a PHD from MIT, experience includes holding the office of the Minister of Finance in Nigeria and the Managing Director at the World Bank. Yet, with all these qualifications, she was still blocked by the Trump Administration from taking up the role because she wasn’t “experienced” enough.
I realized that as a Black professionals, our worth isn’t always immediately recognized- regardless of our impressive resumes. I think of people like Tidiane Thiam and his experience as Credit Suisse, Michelle Obama or Meghan Markle and their experiences with the media, and the abysmal portrayal of Kamala Harris on the cover Vogue magazine. I am not in the pedigree of these wealthy, educated, experienced Black professionals by any means — they are completely outliers. I mention them to show what the best and brightest are forced to endure.
The default setting is that we don’t get what we deserve. That’s how the system is designed.
I imagined a conversation with Michelle Obama about this offer- and in my mind- she wouldn’t be mad at the offer, but she would be furious at me for accepting it! I finally understood the principle my partner was referring to. My principle is self worth, and if I don’t put a premium opening price on myself, no one will give it to me.
I realize making decisions based on principle is a privilege that many Black people don’t have. Most of us are just trying to survive.
I believe there was no malice or ill intent on the part of the organization that approached us. They are good people who were trying to help and also saw a business opportunity. We genuinely wish each other well as we continue on our journeys and our paths may cross again when Anü has grown and they are ready for us.
Going through this was really a come to Jesus moment. I had many emotional, mental, spiritual highs and lows. I came up with the following affirmations to ground myself:
“ I don’t exist for an exit.
I have value beyond this valuation.
I am optimizing for purpose over profit.
I ask for help because I am worth helping.
I won’t despise these days of small beginnings.
I keep faithful with the little.
I believe for better.
2. The Smoke and Mirrors of Venture Capital
The VC industry is built centered on signaling and story telling. When I discussed the offer with some mentors and friends — a few of them said “It’s a bad deal, but take it and never tell anyone about the money. It will signal well to investors if you want to do another startup and the optics will look great for you.” Honestly. this was really brilliant advice. It made sense and was super pragmatic.
However, I don’t want to play that game. The announcement of an exit would send waves through the tech ecosystem and I would be the shiny new thing and the narrative of Black founders would be elevated. I could see the Tech Crunch article in my mind, but my soul (and bank balance) would know the truth.
I knew it would hurt Black founders the most. There are so many incredible Black founders would see that and wonder “I have been working on my startup for X years, and they exited after only 9 months? What am I doing wrong?” and would fill my DMs and mentions with questions, requests for meetings, etc. I would’t be able to keep it real with them, knowing that it wasn’t a real win. I am not building a reputation on shifting sands.
The VC narratives can be harmful to Black founders, if I took a bad deal and “finessed” what truly happened- it would be detrimental to me. I would accept pennies on the dollar, and if I cried foul later once the work relationship fell apart, no one would feel sorry for me. However, when white men make these types of deals- even if it falls apart- they have relationships with other founders, investors and FAANG buddies who can quickly get them a new job. I have seen some Black founders who fell in the trap- they have lost respect in the community, it limits the bold moves they can make for Black founders and it lessens their leverage against the powers of the industry. They may have earned money, but in the long term it has hurt their reputation.
Black founders are the only ones who would actually care about my news, and would also be the most damaged by a glib narrative that doesn’t paint a complete picture.
I am not a martyr, I’m making my way to where the money reside, but I am taking the scenic route.
My news would not impress any non-Black founders or investors as no figures would be disclosed so it wouldn’t matter to them. All they would say is “good for you”.
3. We Are Building Something NEW at Anü
In 2016, I was running Lawgistics Legal Consultants, and we had offer for acquisition by a foreign owned consulting firm. We decided to create a consulting arrangement to allow us to transition, but keep working while we inked a deal. After 6 months, we decided not to proceed with the acquisition because of poor communication, a lack of defined authority and different expectations. In the end, we lost 6 months because we had slowed down operations in Lawgistics and it took us a while to get in the groove again.
I didn’t want to make that same mistake of idling at Anü, while waiting for the outcome of this discussion, if anything we stepped on the gas this time. We kept moving, building and working right through the process.
We kept booked and busy.
Here are some highlights:
🚪We just welcomed our interns Chloe and Audrey🎉!
🚪We are excited to implement our new strategy and go- to- market plan with a focus on startup growth. We have waitlist of law firms that want to join the platform 🎉
🚪 We got accepted into UC Hastings LexLab 🎉, a LegalTech accelerator program that is underway!
🚪We may be small, but we are serious about diversity 🎉:
- A 🙋🏾♀️ designed our website
- A 🙋🏾♀️ designed our logo
- A 🙋🏾♀️ designed our brand identity
- A 🙋🏼♀️ did copywriting work for us.
- Our 2 🙋🏻♀️ 🙋🏻♀️ interns from a woman owned startup.
We did this on a $10K budget. Talk about capital efficiency right?!
We paid all our service providers full price and on time.
We did all this on a $10K budget, but large organizations say they can’t find black talent? We are not asking others to do something we aren’t doing ourselves. It has been so much fun working with these incredibly talented women and letting their skills shine through.
— — — — — — — — — — — — — — — —
Founders: I was able to make to the decision to walk away because I have access to some amazing lawyers who are friends and advisors. They walked me through the deal and I came to a conclusion that made sense for me.
If you don’t have a network of lawyers that are supporting you through the startup journey, we built Anü for you. Find your lawyer today!
Follow me for my hot takes, but stay for the impact. Don’t miss out on our updates, sign up for our newsletter here.
📝 Save this story in Journal.