Mission Accomplished 🚀
My First Startup is in the Books ✅
Now’s the time to sit back, relax, and enjoy a drink. 🍻
Dear Diary,
This was a week that took an unexpected turn. Within a matter of days, our startup that was just beginning to pick up momentum ended with an impasse between myself and my co-founder. While the ride involved significant amounts of effort, it was relatively short in the eyes of a typical startup. We were able to part ways before we had substantial liabilities associated with the company or before large amounts of personal capital were invested. So in my eyes, that’s a win. However, there are some things worth noting from this experience.
First, let’s talk about what happened. At a high level, we could not come to an agreement on an equity split with the company. For those who may not know, an equity split is the distribution of shares agreed upon by the founders when starting a company. This typically indicates the percent of ownership each founder possesses and should be a reflection of the amount of investment (via roles and contributions) per individual. In our case, we initially agreed to a 51/49 split with myself being the 51% shareholder. This had its advantages for a couple reasons:
🗳️ If votes were split, we always had one person with more decision power. This meant we would never be in a true stalemate.
♀️ With 51% of company shares being held by me, we were technically a woman-founded company, which meant more opportunities for grants and funding.
So if we agreed on this split with myself having a slight majority, what changed? Well, by definition of equity splits, the split should reflect the amount of investment per individual. When we initially agreed to this arrangement, I was under the impression that we would have an even split of investment with building this company - primarily through sweat equity (aka equity earned through labor), but also through capital as needed. Unfortunately this week, it came to light that the level of investment my cofounder was willing to put in was significantly less than half - with him holding the expectation that I would build the company on my own. With that new datapoint, 51/49 no longer made sense from my seat - and an unwillingness to discuss any other split is what led to our ultimate demise.
Now, this is just my side of the story. Of course, there is another side not represented here.
While working on a startup full time is inherently a risk, the end of one can feel like a failure if it doesn't end with some sort of payout for your efforts (think acquisition or IPO). However, in this case, there are no feelings of failure, sadness, or regret. Instead, there were many things that went right and many learnings that wouldn’t have happened if I hadn’t taken this risk! So, let’s talk about them here.
🪢 Learning the Ropes
There’s a lot to learn when founding a startup. When you’re getting started, information is hard to come by because of the amount of unreputable information circulating the internet. While walking into this venture I knew some of the tasks required for success, I certainly didn’t know everything and, more importantly, why the tasks I did know were necessary. (This is why I started this blog in the first place. ☺️) So if you find ways to learn what you don’t know from people you trust, you give yourself the gift of rapid growth, which can be a game changer in the startup world. For me, Aequa gave me that opportunity. Without running the startup full time over the past few months, I wouldn’t have had the chance to participate in the RAIN Catalyst Spring Tech Accelerator, which provided an invaluable opportunity to rapidly learn from entrepreneurs about what it means to start a business. That is valuable information that will follow me into my next adventure, making the startup process much simpler.
👋 Networking and Connections
I mentioned this before, but having the title Co-Founder and/or some C-Suite Executive (like CTO) suddenly gives you credibility you didn’t have before. It literally feels like a light switch. Since taking on this role, I’ve had more executives approach me to chat, seek advice, and learn about my projects than ever before. I’ve even been invited onto an advisory board to lead innovation in the UAV community - something I would have never had a seat at the table for just four months ago. By meeting people at all stages (newly building like myself or more fully established), I’m starting to learn more about the entrepreneurial community and the information that lies in the inner circle, which allows me to learn faster and more reliably than before.
👣 Figuring Out How to Stand on my Own Two Feet
When you’re running a company, you’re the one making the decisions. Suddenly, things that previously took significant amounts of effort feel effortless. And with that transition means learning to recalibrate how and where you put your energy. Like someone learning how to walk again, you need to learn to regain your balance, find your footing, and learn a new normal. And while it’s clumsy at first, it leaves you better off in the end!
🤓 Learning What it Means to be an Entrepreneur
Through these last few weeks being employed full time earning an annual income of $0, I learned a lot about what it means to own a business, found a startup, and make a sustainable life for yourself. What I’ve discovered is that it comes down to finding multiple sources of income (instead of one or two) that fulfill the needs in your life as well as your projects (like your startup for example). My mentor had a great way of thinking about this (which I’ll put in a future blog post), but it ultimately comes down to not relying on your business to make you money (until it is actually making money on its own). And reshaping my thoughts around money and income to accommodate the entrepreneurial mindset has been eye opening and incredibly beneficial! It also means that while this startup didn’t work out, I’m not in any rush to jump back into another job. Instead, I’m ready to take on the next project.
Now these were my learnings - but here are my wins! 🏆
Ran my own startup from beginning to end.
Stood firm in my values as a startup founder and used that to guide my decisions until the very end.
Reframed my mindset around income and money, allowing me to try again instead of rushing back into another job or settle for an unemployed status.
Quickly learned everything I need to know for running an early stage startup and finding funding (when appropriate) as well as the common pitfalls most first time founders make.
Documented my journey for others to learn from.
Built confidence in myself.
And many more I’m sure I’m forgetting at the moment. 🏆🏆🏆
At the end of the day, I co-founded my first startup. Was this my first startup as a founding person? No. But it was my first startup in a leadership position. And now as I go into my next venture, I’ll be that much more experienced in the beginning phases of the project.
My badge to honor this rite of passage.
Leila Kaneda
Co-Founder and CTO
she/her/hers
P.S. New projects are already in the works, so this story is far from over. 💫
