A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.
In the course of my work with startups I’ve found there are three main reasons for serious screwups.
- Founder ego
- Speed (cramming 20 hours of work into 12 hours day after day almost guarantees a few (or more) blunders)
- Tight budget (leads to cutting corners)
Landers made a minor change in a form job offer letter, but didn’t have it reviewed by their lawyer.
“I took a boilerplate job offer letter and updated it—I thought—for Blue Corona,” (…) He considered running the letter by an attorney, but at the time it didn’t seem worth the expense for the struggling startup. “We had no money back then. Zero. We were losing money in fact,” recalls Landers, who launched the Gaithersburg, Md.-headquartered startup in 2007.
It’s hard when your company is running on fumes, let alone negative fumes, not to see legal advice as a luxury and take a pass.
But it proved a very costly mistake.
Changing the language of the job offer letter relating to commissions amounted to the addition of one bullet point, he notes. In the end, Blue Corona paid its former employee between $10,000 and $12,000, probably 10 to 15 times what it would have cost to have an attorney update the job offer letter, estimates Landers.
Funding, and money in general, have gotten tighter, so it’s tempting to skip checking with a lawyer, accountant or other service pro.
But it’s smarter to count Landers as your avatar and what happened to him as a lesson learned and a bullet dodged.
Image credit: HikingArtist