Presto Magic

Part 3

So, how’d my unwillingness to broach the role change subject ultimately contribute to my willingness to come forward about the expenses? First off, because I felt so undeniably misaligned in my current role that I didn’t care about being fired anymore. At times, the misery from misalignment was so strong that I’d convinced myself that losing my job felt preferable to persisting in my present predicament. I figured that, in the worst case scenario if I came forward about the expenses, then I would get fired and go do something else, most likely pour myself into writing or start a coaching business. I figured that, even if I got fired, at least I’d have more time to help people in ways that I cared about. But still, I couldn’t bring myself to take my own honest action, regardless of how hopelessly stuck I felt in my current situation. I didn’t see a way to get myself out. I couldn’t bring myself to let go of this lifestyle that I’d dedicated so much of my life to attain. Everybody was constantly telling me how lucky I was to have the life that I did. I was making incredibly good money. I had an admirable position in society. People respected me. People listened to me. I didn’t want to risk giving it all up, even if it meant moving closer to alignment. I didn’t want to risk looking foolish, even if it meant being honest. So, I began living out that old homage about “the preference of known misery.” However, once I became aware of this, I let the dissatisfaction really seep in. It injected itself into my bones and it refused to relent. I knew that if I aimed to be a coach, an example to other people, then I couldn’t live with myself if I didn’t practice what I preached. So, I transitioned my full focus, all of my energy & attention to living honestly. I refused to exist in this misalignment anymore. I was going to be who I aspired to be. I was going to start living honestly. The truth is that I had already made a decision to leave before deciding that I would come forward about the expenses. The truth is that I was planning to put in my 2-weeks notice upon my return to the New York office from my most recent work trip. I was going to put in my notice, but I figured it wouldn’t be a 2-weeks situation. I was going to offer to stay on for as long as they needed me to in order to ease the transition for the team. I was at peace with the decision. I was going to leave the company and move forward to something new. I was excited about the future for the first time in awhile. I figured I’d be making a graceful exit from the company. All my relationships intact, just in case I ever wanted to reverse course and come back. I had plenty of savings, which would buy me time before jumping into “the next thing.” I could have the space to lean in to my creativity. I would have the chance to continue deep diving with people without worrying that I was neglecting my direct reports or otherwise dropping the ball on my investor responsibilities. My plan was all set. I was at peace with my decision. I was ready for my exit. But then, the day before my flight back to New York, I wrote a journal entry. In it, the truth came to the surface. I was informed that what I needed to do before leaving was come forward about my faulty expense reports. I had to own that truth before departing. Otherwise, no matter what I did for the rest of my career, those mistakes, those lies would always haunt me. I would never be able to make enough money to settle the score. I would always know that some amount of what I stockpiled wasn’t rightfully mine in the first place. Right now, before leaving, before collecting all those bonuses and “Attaboys”, I needed to own up to what I’d done and face the consequences. As much as my self-protective ego just wanted me to leave, the directive was clear. No submission of the 2-weeks notice until I’d done this first. Upon reflection, now I see that the coming forward about the expenses had many benefits. But, back then, why did I do it? Simply because I was instructed. I was informed by my True Self that this was the path that was most honest. I was All-in on honesty and this was the way to own that identity. I wanted, more than anything else, to live honestly. So, this is what I was going to do. But, upon reflection, now I see that the coming forward about the expenses had many other benefits as well. It wasn’t just fear of rejection that prevented me from proposing my coaching role change within the company. I wasn’t fully convinced that I wanted to do it as an employee of the company in the first place. The more I observed, the more I was concerned about blind adherence to these Standard Operating Procedures. I started to notice that, even people who I thought wielded unquestionable power within the company, would consistently tell me “that’s above my pay grade” whenever I proposed firm-building or people-elevating ideas to them. They’d acknowledge that what I said was a good idea, but they weren’t willing to risk their standing in the partnership to even propose these company-improving programs. Again, I don’t blame them. I understand that they had their reasons. They might have been solving for job security, reputation, or simply, a maximized salary. It doesn’t make them, any of them, a bad person. It just means that they were solving for something that was different than me. And yet, I was reporting to them. I was working for them. So, I questioned whether I wanted to continue to opt-in to this hierarchy. I started questioning whether I wanted to opt-in to this hierarchy, especially when dealing with other people’s sensitive information. At the moment, I was conducting these deep dive conversations with people outside of the scope of my company responsibilities. The way I approached the conversations with internal colleagues was as a friend, not a co-worker. I wasn’t hunting for company gossip that I could then use to my benefit later. I was only interested in talking to them, getting to know them, mostly by listening and asking questions. The way I approached the conversations with founders was as a confidant, not a prospective investor. (This is making me see, as I write this, that maybe the role I was hoping to transition to was not necessarily as “coach”, but rather, as “confidant”. We could all use one of those, especially when facing our toughest situations. Often, we don’t need somebody who’s gonna tell us what we “should do.” Often, we’re the only ones who know what it is that needs to be done. So, what we really need is somebody who will listen and pressure-test our assumptions. Somebody who we know will be there for us, to have that next conversation, regardless of what happens. There’s plenty of advice-givers out there. And they all have their own ulterior motives. So, I have no interest in being one of those. But I do want to be a confidant to whoever needs one. Because, Lord knows, I’ve leaned on some close confidants of my own, especially when confronting my life’s most challenging decisions.) When I was speaking with founders, there was a very clear delineation between what was “work talk” and what was “life talk.” The content of the “work talk” would make its way into my notes that got recorded in the company CRM. The content of the “life talk” would not. It didn’t belong there. Those discussions got deep for a reason. They were able to get deep because there was a presumption that they were private. 1-on-1 conversations. Intended to stay that way. I made it clear that the “work talk” information would be privy to the rest of my teammates, but the “life talk” content would stay between us. I had no interest in leveraging founder’s personal truths to win investment opportunities. That felt slimy and unnecessary to me. I’ll admit that I wasn’t perfect at this. I’m sure I accidentally recorded some information in our CRM that founders would have preferred to keep private. But, this was a principle that I aspired to, especially when I developed the confidence to live aligned with my personal principles, rather than just submit to what my bosses wanted me to do. All that to say, I was concerned about the challenge of handling other people’s private information within the scope of a company responsibility. If I were now paid by my employer to have these conversations, then what information would I be required to share with them? For example, if an Analyst shared with me that they’d traded confidential information with a competitive investor in order to get a list of prospective companies that are raising (a practice commonly known as “horse trading”), then would I have the opportunity to forgive them? Or would I be required to disclose this information to firm management? Would I have to follow a strict list of Standard Operating Procedures that ends with the employee in question being fired? What if I could read the remorse on their face? What if I believed that they’d already learned the lesson from their mistake? What if I could tell that they were never going to do it again? What if I could assess the situation myself and see that no collateral damage was done? I didn’t yet have the answers to these questions. And, I wasn’t convinced that I wanted to sign up for this deep-conversation-having role until I had them. So, I decided to make myself the guinea pig (or scurrying rat, if you will). After all, I’d personally engaged in horse trading back in my overly-stressed & extremely-uncertain Analyst days. I sorta knew it was wrong from the beginning because I felt like I had something to hide whenever I did it. But, was everybody doing this? Was this sort of behavior expected? Is this one of those undiscussed investor norms where everybody claims that they don’t do it publicly, but are shameless about swapping their thoroughbreds privately? I was an Analyst once. And back then, I didn’t have anybody I could ask about these unwritten rules without subjecting myself to those oh-so-scary Standard Operating Procedures. What happened if the simple act of asking these questions were taken as an admission of guilt? Would I be fired on the spot? If I was questioned about whether I’d done it, would the accuser care to listen to the nuances of my justifications? I didn’t have the answers to these questions. So, I was never going to come forward and ask the questions until I did. So, in the end, I just stayed quiet. And, eventually, I just stopped doing it, mostly because it made me feel icky. But, I will admit, I did slip up a few times and shared confidential company information with an investor friend. Both of the times in more recent memory, it felt harmless. And I even convinced myself that it would be advantageous for the company whose information I was sharing. But, I still regretted it all the same. No matter how much a friend would thank me for being “a lifesaver” and no matter how much I convinced myself that sharing this confidential info was advantageous, or at the very least, inconsequential, I ultimately felt a deep wave of guilt because I’d broken my own personal principle. I violated my principle of privacy. This information wasn’t mine to share. I was privy to it and I was also entrusted to keep it private. But I didn’t. (Just to clarify, this information sharing was more akin to horse trading than insider trading. This was information about early stage private companies. I don’t need any more blow up misunderstandings. I’ve had enough of those. More on that later…) All that to say, who would I be to reprimand this hypothetical horse trading analyst for their mistakes? If anything, I would see it as an opportunity to share with them why this sort of behavior isn’t worth engaging in from the beginning. It erodes trust between us and the founders we aim to service. This would be a huge opportunity to redirect their approach going forward. A “learn from my mistakes” mentality. But, how could I encourage them to come to me in the first place, if I would be required to report them for any of their mistakes? How could I, in good conscience, say to them, “Trust me”, only to go off and spread their secrets in the name of following the SOPs? How often would I be placed in these dilemma-inducing situations if I were having these confidant conversations on a daily basis? If I were encouraging people to share with me openly, if I were working to show people that I was trustworthy, then I turned them in to “the authorities” (read: powers that be), then what kind of hypocritical precedent would I be setting? I would immediately rob myself of all of my hard-earned trust currency. In an instant, I would lose all of my credibility. What would be the Standard Operating Procedure if a portfolio company leader told me that they misrepresented their numbers last quarter? I can’t imagine the SOP would be favorable to the individual. In fact, they might have a big ole “Fraud” charge slapped on their back as they got shown the door. And then we wonder why fraud cases are only reported after they’ve spiraled out of control. The “fraudster” knows that they’ll be forever labeled as such, rather than shown forgiveness. So, the risk of addressing the situation when it’s still in its infancy isn’t worth it for them. A single mistake compounds on itself because the perpetrator is afraid of what admitting to the mistake might do to them. They’re afraid that, even if they come forward, the humans that they come forward to will simply default to the Standard Operating Procedure. Why do founders so consistently embellish their numbers or withhold potentially-dealbreaking information when speaking to investors? Why do they wait for the investor to uncover the skeleton in their company closet only after the months-long diligence process? Wouldn’t everyone save a whole lot of attention, time, and money if the founder was just honest from the beginning? But who can they be honest to? Their board members will claim fiduciary duty. Their employees would simply be confused. “Aren’t these decisions above my pay grade?” They’ve got nobody. They’re certainly not going to share their blemishes with an Analyst. The Analysts have been coached to ignore any company that doesn’t fit a specific set of scale and growth metrics. They’ve also been coached on a laundry list of other deal-killing characteristics. So, they have no interest in considering the situation-specific nuances. After all, there’s very strict parameters on what these Analysts are allowed to elevate to their boss’s attention. Strict Elevation Parameters. SEPs, if you will. So, what incentive does the founder have to be honest? If the founder’s aware that the Analyst is only going to elevate companies that meet the SEPs, then, if their company’s numbers fall outside that range, but for good reason, then why would they be honest to a person who isn’t interested in listening to the nuance of the situation? And it’s not the Analyst’s fault. They’re far too busy ripping 25+ calls a week to have time to consider the specificities of any individual company. So, it’s easier for them to simply follow their SEPs. The founder knows this, so they massage their numbers a bit or they just withhold potentially-dealbreaking information. They know it’ll come out eventually, but the hope is that, by then, the investor will be more interested in the nuance because of an escalation of commitment. But, of course, if, once it’s uncovered, the information does prove to be a dealbreaker, then everybody just wasted a whole lot of attention, time, and money. Again, I don’t blame the Analysts though. As mentioned, they’re talking to far too many companies per week to consider the nuances of any single one of them. I don’t blame the founders either. They’re in a system of capital raising where honesty isn’t rewarded. As much as investors love to tout the importance of reputation, nobody’s rewarding the founder who’s honest from the beginning. Us investors were too busy horse trading with fellow breeders at competitive companies to bother sharing the story of the founder who represented their numbers honestly. If honest founder’s company falls below the industry-standard SEPs, then it’s not even worth mentioning. This founder story reminds me of a situation that I found myself in about a year ago.

Part 5