In this episode we ask the unpack the question of: Do COO's have a two year shelf life? We discussed this topic with Casey Woo, CEO @Operators Guild. 

We discuss the following with Casey: 

• What is the role of the COO? 
• Why does the COO have a two year shelf life? 
• If that is the reality, how should one think about their career? 
• What does this mean for 4 year option grants? 
• What are the key terms every COO should negotiate? 

References

• www.operators-guild.com
• https://summit.operators-guild.com/2024

Biography: 

Casey Woo is a seasoned multi-stage operator and 7x CFO with over two decades of experience in business operations and finance from investment banking on Wall Street to Silicon Valley tech start-ups. 

Casey now leads 800+ CFOs, COOs, and Biz Ops company builders as the co-founder of Operators Guild, a community for professionals in strategic finance and operations roles. He believes strongly that community is what makes the difference for start-ups and professionals. 

When he’s not working, Casey is spending time in California’s Bay Area with his wife and three children. 

Summary:

• CEO shelf life and software frustrations. 0:06
• Brandon and Bethany discuss their least favorite piece of software, with Brandon naming Microsoft Teams as his least favorite and Bethany agreeing due to its poor performance on Macs.
• Both agree that the entire Microsoft suite, including Word, has always been problematic and frustrating to use.
• Bethany and Brandon discuss the pros and cons of Google Docs and Microsoft 365 for collaboration, with Bethany preferring Google Docs for its ease of use and collaboration features.
• Brandon shares his experience of transitioning from Microsoft to Google Docs, finding it difficult to adjust to the new platform but ultimately appreciating its collaboration capabilities.
• Bethany: Transition from growth to optimization occurs around 50 million in revenue and 250 employees.
• Brandon: First two phases of growth and commercialization are enjoyable, but third phase of optimization is less enjoyable and happens around 50 million in revenue and 250 employees.
• Communicating option value to employees and talent acquisition teams. 7:57
• Bethany suggests using a product like Lecce to help employees understand the value of their options and how they vest over time.
• Brandon agrees that communicating the value of options as part of compensation is important, and notes that their company could have done a better job of this in the past.
• Brandon and Bethany discuss the importance of educating employees on option grants and their value, including providing a clear framework for career progression and regular updates on the terms and benefits of option grants.
• Casey Woo, founder of the Operator's Guild, shares his experience of implementing option grants for employees, including tying them to job role and seniority, and providing awards for top performers to increase their options.
• CEO role and responsibilities. 12:50
• Casey Woo shares insights from 35,000 hours of listening and talking to CEOs, highlighting the diverse reasons why people want to be CEOs, including wide impact and not being a CFO or salesperson.
• Woo challenges the common view of CEOs as a single role, emphasizing the various perspectives and responsibilities held by CEOs in different companies and stages of growth.
• Casey Woo argues that a CEO's role is not just one person, but rather a complement to the CEO and a gap filler.
• CEO roles, decision-making, and power dynamics. 16:53
• CEOs face unique challenges, including rapidly changing roles and delicate power dynamics with other executives.
• Casey Woo emphasizes the importance of clear decision-making roles and responsibilities in a CEO-founder relationship, avoiding confusion and undermining the CEO's authority.
• Bethany agrees, citing decision-making power as a common challenge, particularly with founder CEOs, and discussing strategies to address it.
• Bethany and Casey discuss the role of a CEO in a scale-up company, with Bethany advocating for a two-year vesting schedule and Casey suggesting a step-two approach to becoming a CRO or CFO.
• Casey emphasizes the importance of understanding the expectations and limitations of a two-year CEO role, and how it can lead to a more successful transition to a permanent position.
• Stock options in the UK and US, with insights on vesting schedules, taxes, and exercise windows. 24:01
• Bethany learned that cliff vesting options, where only a portion of options vest after a certain time, was common in the UK 10-15 years ago but is no longer used.
• Bethany and Casey Woo discussed the challenges of stock options, including high exercise costs, limited time windows, and uneven vesting schedules.
• Options for early-stage companies in the UK and US. 26:33
• Brandon and Casey discuss the differences in UK and US options laws, with the UK offering lower strike prices and longer exercise windows.
• Casey argues that it's employee-friendly for companies to offer longer exercise windows, as early-stage companies need time to reach value.
• Options negotiation and key considerations. 29:03
• Bethany and Casey Woo discuss the importance of negotiating options and understanding the terms, including strike price, vesting, and good lever provisions.
• They emphasize the value of having a clear understanding of these terms to protect one's interests and maximize the potential of options.
• Equity compensation and career growth for scale-ups. 31:18
• Brandon recommends revising the Articles of Association to ensure board discretionary ownership doesn't affect an entrepreneur's livelihood.
• Casey Woo agrees and adds that double trigger or single trigger acceleration of vesting is important for operators and senior operators in the event of a change of control.
• Casey Woo emphasizes the importance of understanding the stage of a company and its evolution when negotiating compensation and setting career goals.
• Casey encourages listeners to be realistic about their expectations and to transform and exit the company within a set timeframe, rather than staying for an extended period without achieving goals.

Brandon 0:06

Hello everyone and welcome to another episode of the operations room a podcast for CEOs I am Brandon mincing. I'm joined by my lovely co host, Bethany Ayers, how're things going? Bethany?

Bethany 0:16

Define, they always ask me the same question. And yet every single time he asked me the question, I'm like, Oh, that's a new question. Today,

Brandon 0:23

it feels new, it feels fresh every time.

Bethany 0:27

You think I should just like, think about it in the morning, like, oh, Brent and I are gonna do one of our chats, he's gonna ask me how I am, I should have an answer.

Brandon 0:36

Every time it's surprising.

Bethany 0:39

How am I gonna say something interesting? So, I do have a question for you. Just because software is one of our favourite things to talk about. What is your least favourite piece of software? Well,

Brandon 0:52

that is a mighty fine question, because I just had an example of this yesterday. So Microsoft Teams is by far the worst product on the planet, I would say. So I was presenting to a leadership team yesterday, are supposed to be and it took 20 minutes basically, of like fiddling with teams to try to make it work. And I do not know what was happening. But you know, we had the classic, they couldn't hear me. And then I called in, and then we're having like me freezing on the screen, they switched up their Wi Fi, I log back in again. And then at that point, because we had 90 minutes, a hard stop, we had to reschedule the call. I said to the people person, hey, let's just have a quick chat about the rescheduling, so that we got onto a zoom call. And guess what happens? It is absolutely perfect. And I'm just like, why don't we just start with Zoom to begin with, as opposed to like screwing around with teams in this case. But this product is terrible.

Bethany 1:42

I agree. Are you on a Mac? I am on a Mac in hates Mac's? I working with a company that's on Microsoft. And so I now have all of the Microsoft products and I have to go on teams. And I have to also figure out like the team chat stuff. And whenever I go on my computer to sounds like it's about to take off. It eats up every bit of CPU, my camera crashes all the time. Yeah, I hate it.

Brandon 2:09

So the entire Microsoft suite is what you're telling me? All of

Bethany 2:13

it. Yeah, I mean, word has always been horrific, right? If you want to try and add a picture in or adjust a paragraph, it goes crazy, and it always has. But teams is bad. And now they're trying to add more features to make it more integrated and cool. And you can take notes in the side panel. But then we don't really know where the notes have gone. And they don't reappear, but every bit of your chat you've ever had with a person shows up on your team's chat with them. When

Brandon 2:41

Bethany 3:13

not entirely convinced it has improved. And also might be user like the way people tend to use their do their workflows. But we were reviewing a contract. And the first two people reviewing the contract sent it as an attachment on email. And so therefore, you ended up with the multiple version hell, and somebody finally moved it over to SharePoint. And then people were editing that but it was still quite glitchy I opened it up accidentally on my browser, because that's how it defaulted. And then I could do nothing, and then had to like transfer it to word. It's just not seamless. Google Docs now has full functionality. But when I first started using it, I had spent my life in Microsoft and was a PowerPoint super user. And so when I first moved to slides, so it's just like, What is this? I can't even indent or control where my bullets show up. Why would anybody use this, but it's a perfect example of one killer feature. And that was collaboration. And once I got over not being able to control bullet points, I realised that that beat everything else.

Brandon 4:16

Alright, so we have got a wonderful topic for today, which is do CEOs and scale ups have a shelf life, and we are talking to Casey Wu. He is a seventh time CFO and co founder of the operations Guild, and we'll have that conversation with him. Just a bit of a warning alert, that conversation kind of goes off track to certain extent. And we start talking about option grants and the terms Run option grants that are important for CEOs specifically. So watch out for that. That's a great conversation as well. So before we get to our chat with Casey, a bit of a back and forth between Bethany and myself, I wanted to ask you two questions. And the first one is, is that true? Do CEOs have a shelf life and scale up companies? Yes,

Bethany 5:00

I think so for two different reasons has smile pause to think one is having a favourite stage and or getting bored and or running too hard that you exhaust yourself. Those would be possibly all of my reasons. And also the company outgrowing you, not being able to keep up not being able to learn with the changes.

Brandon 5:24

Yeah, that makes sense. And when do you think that transition point is in terms of the size of the organisation? I

Bethany 5:31

Brandon 6:56

no, for sure. Because I kind of think about it in a couple different phases, which is, I feel like phase one is always around just pure play growth, you're trying to grow the company. And that requires a tremendous effort from back office to support that growth. And the other part of growth really is the commercial end product to some extent, repeatable and predictable process to get the initial germination of PMF into a track into a groove that can basically rinse and repeat over a cycle to get to the revenue that you need to for the organisation. And then the phase after all, that is all around optimization, optimization of resources and efficiencies and these sorts of things. And I think those first two phases I really enjoy, and I'm quite good at the third phase is less me I think, to be honest, the question is, when does that transition happen in the company? I think that's around 50 million arr. I think it's around 250 employees, I think it's around that point where it starts to switch from huge growth, rinse and repeat, kind of predictability to something a little bit more optimization oriented. And I could be wrong here. But it feels like it's roughly in that zone somewhere.

Bethany 7:57

Brandon 8:13

Yeah, that is so true. Lovely. So I will now ask you a second question because our conversation went off in this direction. So what is the best way to communicate the value of options to an organisation? Because I know, upon reflection, when I look back at my last company, we did a poor job of this, generally speaking, and it occurred to me during my last phase of the company, that we should have done something dramatically different in terms of communicating that value. And I have a couple thoughts here, but I'm gonna pass this to you first, Bethany, what's the best way to really communicate that value to the company? Do you think?

Bethany 8:44

So if you're talking about literal value, what we ended up using was leggi. And then there's the other one that's like the bigger market leader. I can't remember what it's called. Do you remember?

Brandon 8:53

I know legit, but I don't know the other leji

Bethany 8:57

as a product, had some flaws. It wasn't fully formed. But if people wanted to understand what their options were literally worse today, it was a great way to go in there. And you can also see not only what are your options worth today, but as they vest. What are they going to be worth tomorrow? So that really helped us have people understand the concrete actual value. Of course, you have to have an exit and then the tech market crashed and those valuations are probably not the same as what's in Lecce today. But it was a good indicator. If you're talking about more generally, the value of why you should care about options, then it's around the culture of the organisation. We're all owners. We are sharing the wealth it's not just about the top table earning.

Brandon 9:51

So agree for sure, with the visibility part the awareness and visibility through a product like leji where anybody in the company Was there a particular option grant, they can look at that whenever they choose to, to understand where that sat, what that value is, and get a sense of what that trajectory might look like over time, based on different circumstances and kind of quasi scenario planning. So I think that's fabulous. I think for me, that was a miss trick, I think we should have done that for sure. Because I think it's just a great way of making making it clear to people that they should view this as part of their compensation. And it's obviously a variable component of compensation. In this case, it can be talked about in that fashion, but it should be considered part of their comp package, as opposed to some weird, unknown abstract extra, they don't quite understand in this case. And the second bit is, you know, when it comes to the talent acquisition team, they have the salary bounds for the roles that they're hiring for. But equally, they should also have clearly the option grant values associated to those particular roles and bands basically, from the outset. So for the talent acquisition team is also not a mystery. And the talent acquisition team can also speak to the value of it to the prospective person to be hired. So they get it, they get that value. And it's not simply a question of X salary. But there's a broader comp package here. And this is kind of what it looks like and why it's valuable. And then the second piece of that that's related, is, you know, what do you have that internal career framework where you've got your framework for the evolution of a marketing role as an example, that marketer can clearly see step by step, if they go up the chain of promotions, you know, here's what the bands look like. But here's also what the option grant increments are also going to look like for that individual as an example. And then the last bit is kind of the standard educational process, which is in the onboarding process, they should be versed on option grants, and the value of that and the terms attached to that. And equally, the VP of Finance or whoever is leading finance should probably on a yearly basis, do kind of a roll call presentation just around what are options. One of the terms, why is that useful or not useful, and then refer them back to things like leggi for future purposes. So

we did all of those things. And it was really helpful. That one added was not just option grants tied to job role and seniority, but also a award for top performers at the end of the year. And so top performers could continuously increase their options. And it was a way of making top performance matter. Yeah,

I absolutely love that. That's fantastic. So with that, why don't we transition over to our conversation with Mr. Casey Whoo.

I'm delighted to welcome Casey Woo to the podcast. I met Casey when he was doing a London or maybe European tour recently. And Casey is the founder of the operator's guild, or previously being a CFO, CEO. Oh, and a bunch of other things. Welcome, Casey.

Thanks for having me.

So you come to us today with a bit of a thought, I think a thesis around the CEO role and scale ups. So can we be sure your thesis?

Yes, so I've had seven tours of duty at startups, I would say two to three of them were basically either the CEO or pretty much acting as a CEO, slash CFO, and the rest are pure CFO. These companies range from precede a, b, c, d, pre IPO, everything from pure SAS to heavy operating, and prop tech. The other part of my knowledge base as I before I lead up to this is having interviewed 1100 operators one on one over 10 years. That's the LG AI interview, almost every single person who applies. I've heard every story under the sun, from every position under the operating umbrella. And I've watched all my friends go through the journeys, and I went through the journey. So what I'm about to say is a combination of 35,000 hours of doing listening and talking about CEOs also call the CEO, it means a lot of things to a lot of different people in a lot of different countries and a lot of different stages. The ones I'm referring to, will be early stage, high growth tech, generally VC backed early stages in under 1000 people, maybe under 500 people, no defined it. I think there's a lot of my colleagues and friends who want to be CEOs. And I always ask them why? Because all sorts of reasons. Well, a big one is like wide impact. A really big one is well I'm not a CEO, and I don't want to be one. The third is well, I'm not a CFO. Because that's accounting and finance II and I'm not that I'm also not a CRO. I'm not a salesperson, but I'm senior, and I can do a lot. And I'm not Biz Ops, that's like a consultant or whatever, like so you also have this role called the CEO. Oh, that's from the person side from the company side. And by the way, everything I say here is a kind of blanket statement fire for effect. Okay? Clearly this is not everything. But I'm doing this because I want people to think about this extreme view of CEOs. In the US, I think CEOs, I see Sheryl Sandberg thing, what, 15 years at Facebook, Tim Cook of Apple, it's sexy without the, you know, spotlight on them and is ultimate building, right? You're the number two at Apple or you're the number two at Facebook. And we love being number two, right? Don't care for the glory, but we care for the impact. And the diversity of things to do. What I challenge people to think about is I think CEOs having sat in the boardroom when we want to hire one, think about when someone even thinks about hiring a CFO, half the time is because the CEO is not doing something they should be doing and don't want to do. So I call it the one minus the Yang or the Yin, to the CEO. It's not a job description that you can find CEO it's find the CEO, one minus that is your job. Cheryl, was the non technical products at y magically, because Mark was product technical. Tim Cook is more supply chain, an actual supply chain. Apple is a hardware business, Steve Jobs was Product Marketing vision, they complement each other very, very well. So on one aspect, what is the CEO, I think it's the complement to the CEO. The second, you can also call it a gap filler. Now it could be filling the gap of a CEO, it could be filling the gap. But we don't have a product team, we have a nascent sales team. We don't even have an HR team. And the Navy SEALs come in called coos operators who just fill the roles.

We don't have any experience people in the exec team, you

can call it the adults in the room, the well sorts change agents, but notice, I'm setting this up for the life of a CEO. If you flip everything I said on his head, there's a few dangerous things about being a CEO. The first is, if the gaps are filled, what do you do, your job is to fill the gaps. And eventually you fill them. You were doing kind of product cuz there's nobody, you just hired a head of product, because it got big. You're doing sales ish and marketing. And now you just hired a head of sales. Oh, and the head of marketing, you pretty much what I call, like, start chopping off your limbs. And that can be a great thing because the company is growing, and you can afford them and there's full time need. But all of a sudden, what you started as is a very different job now. Whereas the head of sales, they still keep the head of sales role. It's a swim lane. They're very distinct swim lanes in companies, finance, HR, etc. CO is not a swim lane, in my opinion, it's a temporary interim gap fill one minus, that keeps swaying with the business and changing if the CEO changes what they want or care about. That changes you. Okay, so that's one aspect is, it's not a good good or bad thing. It's just, it's a unique part of being a CEO. And what that generally translates to is a very short tenure in a high growth company. Because things are changing. So fast gaps are filling so fast. On the second side is political dynamics. Some CEOs have this very interesting power dynamic with the CEO, right? Because everyone sees that their CEO could be are you outranking all the other execs, are you the same? Do you lead them when the CEO is travelling? So there's internal CEO, external CEO stuff, without going on too long. Those power dynamics are very fragile. I'll give you an example. I know of a CEO that got too good at their job. They made the CEO sort of look bad. All the CEO meetings and the way they ran things, were just people just respected that person. They liked it. And the CEO didn't really like that was threatening them. Well, let's just say who wins in a battle between a CEO and CEO or a founder and let's just say magically, that person got marginalised second one could be they sit down day one, what do you do and what do I do? Or obviously, okay, great. Tell me where I have we call it who has the D who has decision making? Who has the D? Okay, you have to do this you have oh my god, I'm so happy. You're here shiny object. This is really amazing. I've been dying to have you great. You have the D on all these departments Great. Three months later, everything's going swimmingly well, CEOs running that and CEOs running that and all of a sudden the CEO calls in the CEO. Hey, I just heard from the sales team that you changed pricing. No, yeah. Yeah, I don't really think we should do that. Wait, but don't I have the D? You do until you don't? Okay, so what happens after that? The decision gets reversed. And everyone on the this is a military understanding all the troops are like, what just happened? Oh, the sealed really doesn't have final say. It's, as you see, okay, great. The second one was why are we meeting with the CEO then? It's a waste of time. Why don't we just go directly to the CEO Do we call it like mom and dad problems? Who's the one that's gonna make the call? That's why you have to be united. No different than in co parenting or parenting is you can't confuse people who has decision making, it really starts to undermine, people are confused. So then the undermining the CEO starts to happen, or they just start losing the power of this and that and Okay, great, anyways gets back to the gaps are filling, and they don't need you anymore. Where it works, I think really well is extremely clear divisions of duties and true decision making, like at Facebook, like at Apple, or it's a real operating company buy real I mean, supply chain, like CEOs and actual function. Not a title is a function, they run the operations of Amazon, the operations of DoorDash. It's a physical type operation.

I absolutely get it. And also, we've had conversations around all of these, I think we've experienced them ourselves. One of the ones that is constantly comes up is decision making power, particularly with founder CEOs, because how do you get it off of them. But one of the things I wonder about is like the 10 years, what 18 months, two years, you can get a lot done in those 18 months, two years, rather than not being a CEO is the better option just to go in back yourself and say, I can transform your business solves so many problems in two years. But I want a two year vesting schedule, not a four year vesting schedule 100%

That's exactly right is to engineer it and figure out for what reality is. And the reality is I'm going to do a bunch in two years, but it's a very gap filling transitory role. And that's how it should be treated. The second thing I would add to that is have a step two. So I think there's three types of CEOs, generally speaking, there is coo CFO, there coo CRO, and then there's coo CEO. Translation, there's external commercial facing CEOs that are pretty much salesy, and, and then there's internal, very, like, people finance type CEO. And then there's literally the internal CEO, like a Sheryl Sandberg, you position yourself that way, you tell the CEO, hey, by the way, this is how it generally goes. And first of all, London don't think that way, they don't realise that the CEO they're going to bring in is actually going to work themselves out of a job. But if you say that and go, if I do my job correctly, I will have no job in this form in 18 months. But what I really want to do is become the CRO, after that, or the CFO, and I'm qualified to do that for X ray or the internal CEO. Certain CEOs just want to be on the road, they want to be external, they don't actually care about internal they like the outward, you obviously have to understand where the real permanent gap is the permanent swim lane to fill. Why is that helpful, because if you're going to be scheduled to be the CRO, you transition that way, you start to hire away all the non CRO stuff, and you can see more of your time becoming 20% 30% 50% 80% sales, and then all of a sudden your title swaps, boom, you're in the seat. Now you are CRO and they're going to need a CRO forever. It's very clear what a CRO does, and the reporting lines and decision making done. And you've done both you've helped transform and then now you sit in the next seat that you helped create. But if you don't say that they're going to be looking for a CRO while you're building, there's nothing wrong with being a scale up CEO is just setting the expectations that it's more of a two year than a four year forever. And I think all life is expectation based so many operators when they get a role. Whoever thinks about joining an awesome company for two years, like no one goes in there, I think all except if you're us, right, and you're like this is probably a two year thing. Right. But that's also the point that I think is a very important point you're making is just understand. There's like a two year cycle. There's really two chapters here, not just one. Yeah.

And actually, I only learned that in retrospect. So the first time I was there for five years, I had Cliff vesting options, which doesn't even exist anymore. It was my first time in a startup role. I didn't understand what I was signing up for. And then I was like, Okay, I've been here for ages. What do you mean, I don't get anything until there's an event ever. And so after about year two, year three, I was finished, but I stuck those five years out. And then I was like, Oh, I'm never doing that again. And now the market doesn't have it. So I'm going to do a four year vesting schedule. And again, after three years, I was done, but I stuck it out for those four. This

is new to me, because I'm trying to listen to what you're saying is when you say cliff, you mean literally the only way to get all of your options is a liquidation of it.

So that's what used to happen in the UK 1015 years ago, so it doesn't happen anymore. But that's how the UK used to be structured. And now obviously with more tech, you get A time based options, but it's just through my own personal experience where I realised that it's not so much, I just personally lose interest after those couple of years. Once a company gets too big, and it becomes a PR job, rather than an actual operator job, I don't want to do it anymore. And so for me to get tied into for years, I don't want to do maybe we can do two years. So you could give me really great bump for the next two. But I want that value I've created in those first two years is commensurate with the amount of options that I'm given at the start. Stock

options are a great deal for companies, they're a fantastic deal. They're very, very, very, very onerous, and should be discounted very heavily for operators

in the US, US tax is horrible. So in the UK, it's much better. I'm not even talking about taxes, okay, right. Because the US taxes make options really painful. Oh,

that's just one of many really bad things. The number one reason why stock options are so painful, is the money it takes to exercise them.

But again, in the UK, we have very different strike prices. Yeah, I'm

only talking to us. The other thing is, if it's meaningful, generally it's meaningful. Like, by definition, there's some big unicorn people where they have such meaningful stock that it's 100 to 200,000 300,000. But I haven't even thrown in the exercise window yet. It's one thing to come up with the money. It's another thing is you have 90 days. I mean, what you paid me so low for three years, and now I gotta come up with it doesn't matter. It's 50,000. It doesn't matter if it's, it's you got 90 days before it's all mine again,

before I ask you this question, because I actually I'm very curious what the US situation is, to be honest, but to Bethany's point, the UK is fantastic for this quite specifically, because the HMRC, which is the taxation body in the UK, generally speaking, for scale ups, you can get strike prices that are point 0001. Pence, you've

been in like year three or four. They're

closing the loops, like it used to be that it was like a pence. And now, there's been some changes post COVID. But like, a lot of times, there's still a super low strike price. Yeah,

I mean, that they're super low. So I mean, just purely as an example, the last time I purchased options at my last company, they literally cost me 50 pounds. So as an operator for the 90 day window, you can convert and you're good to go. Conversely, I've been in situations in the past where the strike price to your point is higher, and it's quite painful. And the 90 day window is there. And in those cases, there's another vehicle that they provide to you in this case, which is less optimal, but it's still workable, which is to actually not convert them after 90 days, but in fact, hold the options in perpetuity, which in the UK lasts for a 10 year window. So you can actually have them hanging as options as an option greyed out there on the cap table effectively without converting them into shares until there's an exit event. So there's still optionality in that case. But I guess just flipping it back to you like what is the US situation, then why is the strike price so high? It's exactly

what you said is what I teach in my like, negotiating an offer classes is one of the number one most valuable thing you can negotiate. Even beyond severance, or whatever is extending your exercise window to 10 years, it was looks like you guys have already done. Now I think it's becoming a little bit more acceptable. And employee friendly for companies to say we don't have the 90 day we have the two year three or four year tenure. If you think about it, it makes zero sense to have a short window, you're talking about early companies, by definition, they need time to get to any point of value, let alone any point of liquidation event. It's so counter to have such a short window on something that's a toddler, if anything toddlers need the long time, you know, whereas Google doesn't need Google's instantaneous, like it should be quick. So everything was backward. But yeah, it's moving toward ask for a longer window. And now founders and CEOs are realising it's not an unfair request. And at first it was like, What are you talking about? Here's the irony. Most founders don't understand options, because

or they have very few compared to the rest of what they own. Yeah.

So the number of times operators guild members have to teach the CEO trying to hire them. Can I have longer answers when it goes? What is that? What what are you asking for? Did you know it's 90 days? Yeah. So what's wrong with that? Well, you don't pay me any cash. So how do I do that? And then if you tell them about it, they start to learn. So that's happening in the US,

I think it might just be helpful for like a little bit of what we've learned on options in general. So there's negotiate as long a window for buying as possible, because Brandon, that's not like, it'll be in the articles of association. And so you need to actually negotiate on top of it, because the articles will often be 90 days. So you need to go when negotiating that. Yeah,

so I'll double down on that, Bethany. Because you're right, that is not normal. The one I just described for the 10 year option, Grant holding period is not normal, and you have to do exactly what you say, but just basically make a request for them to do it.

Yeah. So there's that you can't really negotiate strike price and Fortunately, but you should always ask and find out what it is for the grants that the options are about to be granted, because it will change over time with the different rounds. So always ask and find out what the strike price is. And also have it be time based and don't have it be anything but linear time based or if you can get it. So it's accelerated time vesting, so that it's, you know, 2525 2525, ideally 5050. But also look at what happens at the point of an exit. And whether or not it just accelerated vesting at an exit, or if you're tied into whatever happens afterwards. And then the final one is understand the good lever provision, or the provision for levers if you're a good lever or badly for by default, and what that looks like, because what can happen is if they have a really bad, good lever, that the board has to decide that you're a good lever, they can just take your all your options away from you. So when you're negotiating, this has nothing to do with the topic today. But it's just come up. Those are the areas that you should look at when you are negotiating your options and deciding whether or not it's a good deal.

Yeah, that is million dollar or million pounds of value right there. It took me a long time to come up with that exact same list. Yep. On severance, which is kind of a good lever thing. And then if you do that, that's the best you can do for yourself. Yeah,

and actually, it's amazing in one way, because Bethany, we've never spoken about this before. But if I was to make two recommendations, was almost exactly the same thing I was gonna say, which is, fundamentally, in your Articles of Association, you're considered to be a bad lever by default, which means that if the board decides that, for whatever reason, they don't like you, you're hoop basically, which means that it can be relationship driven, you're getting screwed out of your options, and you don't want to be in that position. So what you need to do is go back to the board of the articles of association, and I do this for the companies nevermind myself, but get it reversed, where it's good lever where they can only take away your option grant, if there's been like gross negligence or something crazy, basically, where you've done something really silly, essentially. And that's an important lever to ensure that the board doesn't have discretionary ownership over your, your livelihood. And I think the other point around the acceleration of the vesting, massively critical, which is you do not want to be in a situation where, you know, you've been there for, I don't know, 18 months, 24 months, and the company is being bought, and you have two years of options that you're not getting, essentially, because at the end of the day, if you can help that company sell faster, because you've done phenomenal work, you should get compensated for that, which means that your four year vesting period should collapse into that two year period, if the company is bought after two years of your investment options.

Yeah, the other reason I think to add on, we call it double trigger, single trigger, maybe that's what you call it, as well, in Europe, single trigger is literally instantaneously when it transacts, it doesn't matter what happens to you, you will get acceleration, double trigger is if they let you go and your employment is affected within 12 months, generally, you then get accelerated and double trigger for operators, senior operators is a very good one. Because when you generally get bought, or a change of control, you don't need to CEOs, you don't need to CFOs you know, this is my argument, when I asked for it, you know, other positions, maybe, but it's like, by definition, it's going to basically replace me, right. And so it makes total sense for CO CEOs CFOs to have a double trigger or a single trigger on your case. And though it's interesting, I just learned I didn't realise your default was bad lever. So I would say we don't have that situation here for the most part default, is unless you do something fraudulent or bad. I think boards and committees are pretty good with thanks for your help. This is termination for good reason. Rather than that we call it good reason or bad reason. But yeah, so I learned a lot. That's really interesting. Totally

not the topic, but there you go, like not to get screwed when your two year tenure ends.

I go back to like the CEO position, or the CFO position or whatever early stage position is not a 10 year tenure. Right. And so this topic is very relevant about aligning your tenure with your compensation.

Yeah, and I think Casey, this goes back full circle to what you started with, which is missionary versus mercenary. I think to be honest, if you're a CEO of a company, you are very much both in some ways, because at the end of the day, you are on a mission to transform that organisation as a scale of company to something that's unrecognisable to what you joined, and to a tremendous success. You know, and part of that value that you're creating directly is Line of Sight directly to those option grants and that vesting in that valuation to be there at the end of it, and then that golden pot that we talked about. So this is not so much around massive salaries or consulting rates or whatever, it's just, I'm there to transform this company. We are on a mission, we build the value in the organisation and we sell this company, and we are compensated for that. So I think there is a bit of a hybrid of both in my case, Casey,

we're rapidly Running out of time, unfortunately, I feel like we've only barely started our conversation today. Before we go, we always like to ask guests, what's the one thing you should take away from the conversation today?

I think the one thing is thinking about companies and scale ups through their stages, and evolution and less. So titles. Once you see the world in that angle, everything from negotiating compensation to your career path, to seeing around the corner, to the staging of things, which is really where a lot of operating growth operators are yet to stage things, I think become very, very clear. And once you just see it that way, everything just starts to make sense. You know why things are two years here? why things are four years more so in London, like, it just starts to make sense. So that's what I would say is, once you understand that concept, and it's not about titles and functions, and I'm gonna be here for six years, and putting things into perspective of stage, political dynamics, VC dynamics, as people learn all these things, all of a sudden, you can pick and choose how you want to play that. And more importantly, the expectations you set are realistic, you know what you're getting into. So what I'll say is, after my little SEO diatribe, I had a operators guild member who's like, Yep, I agree with everything you said, and I'm so down to be gone in 18 months. Perfect. That's what I like to do. I transform and get out. Great, but a lot of people go in not understanding that. And that's all I'm saying. Just understand what you're getting into. So

that is a lovely way to summarise the conversation. So thank you, Casey for joining us in the operations room. And if you like what you hear, please subscribe or leave us a comment and we will see you next week.