Enhancing shareholder value

I live to work and find value in every gig, but gun to my head... I like working at the start-up phase the most. It's when you have the best chance to make a lasting impact, when immersion seems most worth it, and where learning happens at the fastest speed. It's a rush, and it's sometimes hard to throttle down to non-start-up speed when the client is in a highly cautious consumer segment. Not saying I can't do those gigs; just not my favorite.

Which isn't to say that start up life is always optimal, especially if you wind up regretting your choice of equity backer. (Pro tip: when they seem more concerned about the exit strategy than the propagation of the business... that's a bad sign.) Short-term decisions are often defended by the justification that they are "enhancing shareholder value", which is to say, taking profit.

And, well, balance in all things, and anyone who takes private equity while being anti-profit is doing a lot wrong. But before you roll over and do today the thing that the equity will end the business for tomorrow, this:

Are the people with the most stock options really the only shareholders?

Because I'm naive enough to think that, well, NO. 

Employees matter, even if their share of the stock is non-actionable. So do their dependents and families, given that the conditions of work, let alone the sudden cessation of income and benefits,  has more than a little impact to their lives. Also the customers, given that they've parted with their money and are (famously) always right. 

Start-ups don't start in a vacuum. They start in places with existing infrastructure, talent, resources, laws and so on. All of which has been paid for by others with a share in the business, if for no other reason than the value of their property might take a big hit from, say, finding themselves next to a data center. I'd even extend this to fellow citizens, at the local, federal, and even global level. If your start up only "works" through exploitation, it's even money that it doesn't really "work" at all.

So, the next time you feel pressured to compromise your integrity in the name of shareholder value... expand the concept of who the shareholders are. 

Because those unwitting state, federal and global co-signers of your business? 

Have a nasty habit of becoming much more important than the more direct shareholders later.

Even if they are wielding torches and pitchforks, instead of briefcases and lawyers.