“I think the real misalignment is that entrepreneurs want optionality… When there's misalignment, investors are usually trying to force you to give up your optionality. They're saying, 'We want to structure this company in such a way that you really have to go all the way to IPO or bust.'”
sputnikintelligence.com
Asked what the ideal outcome is when a bootstrapped business takes money from his fund, Tringas says he has no preferred path, and frames the usual founder-investor conflict as a fight over keeping options open.
…as preferred equity. So your series A is going to be preferred equity. And so then the SAFE is going to sort of convert into safe preferred equity, right? So, and it's just going to convert. So it's just a way to reference the equity that came from the safe and is now going into preferred equity.
…bootstrapper wants, the lifestyle business that just keeps going and keeps going better. And then you have this equity conversion thing where there's a shift where it turns more into a VC paradigm. So what's your ideal, what's the happy path for the Calm Fund in a relationship with the business?
…gone on to raise a seed round and raise a series A. And they're sort of going more of a sort of venture scale trajectory. And I'm not unhappy about either of those outcomes or many of the other ones in between. I want to sort of be aligned with entrepreneurs because I think the misalignment is less about like entrepreneurs want one thing and investors want another, although that does happen. But I think the real misalignment is that entrepreneurs want optionality and investors kind of want you when there's misalignment, investors are usually trying to force you to give up your optionality, right? They're saying, you know, we want to structure this company in such a way that you really have to go all the way to IPO or bust because your equity is going to be vesting. You're beholden to a board. You're going to be, you know, earning money every month. So…
I love that. It's not, it's not a happy path, it's a happy traveler that you care about. Oh, wow, that was really good already. Yeah, it's I had my morning coffee. That's all I need. Yeah. But yeah, but that's how I feel. You're making this not about you. You're making this about me. Yeah. As a…
Yeah, totally. And I will say this is like probably the area of the entire new version of the document that I have the most flexibility and am excited to like discuss and flex and tweak and maybe edit on a case-by-case basis because it is a tricky thing. So just to say what we're talking about…
I just wanted to really hear where this came from. The moment you mentioned these, it's almost what is it called, like a non-compete situation, right? That you used to, as an employee, first of all, you have the non-compete that you can never ever work for or talk about your work after you quit or…