[foundation-board] CKAN Spin-out CEO

Mon Aug 17 16:47:55 UTC 2015

On 17 August 2015 at 11:48, Jane Silber <jane.silber at canonical.com> wrote:

> Hi Rufus -
>
> Not sure what sort of feedback you're looking for (if any), but this looks
> reasonable to me.  A couple questions for thought:
>
> - what will term of the contract be? I'm wondering about timings should
> the fundraising take longer than expected
>

We're currently planning on 3-6m and a maximum of 9m (i.e. end of June
2016). Obviously, we want to move as fast as possible.

> - is the transition to post-raise CEO guaranteed in the initial contract?
> Again, I'm wondering about the (hopefully unlikely) situation in which
> Sebastian isn't the right person to carry the spinout forward.
>

We do have the reversion clause which is entirely at our discretion (up
until the point where we close new funding).

> - have you agreed performance targets for the initial period? (e.g.,
> amount raised, by when, in exchange for what equity). I am less concerned
> here about the personnel mgt of Sebastian himself but rather what's the
> commitment of OKF to this venture.  For example, what are we investing (in
> Sebastian, in travel, in marketing, in a roadshow, in business planning,
> etc) and how will we bound/measure whether this initial phase is
> working/has worked.
>

This is a good point. Obviously, he has reasonably aligned incentives: he
wants to raise at the best valuation possible. We also have the ability to
terminate. In terms of it working I think, at this point we should be
looking to raise $2-5m. The real metrics are speed of closing (we want it
done in <= 6m), raising the "right" amount (we don't just want more), and
obviously valuation at which we raise.

Thoughts here are very welcome.

Rufus

>
> thanks,
> Jane
>
>
>
>
>
> On 17/08/15 11:07, Rufus Pollock wrote:
>
> Dear Board,
>
> tl;dr: We would like to proceed to sign a "consulting" contract with our
> preferred candidate for CKAN CEO asap. Pavel and myself want to *check in
> with the Board before proceeding*. (Based on discussion in July this step
> is not one that needs formal Board approval)
>
> *I emphasize that further steps including e.g. incorporation of a new
> entity will, of course, be subject to Board discussion and approval.*
>
> *Context*
>
> We now have a strong candidate for the role of "CKAN spin-out" CEO. As the
> Board will recall this is the first step in the roadmap approved back in
> July.
>
> Both I - who have been leading this exercise - and Pavel are very happy
> with this candidate (CV is attached). We are in the process of agreeing a
> final set of "head of terms" and *I intend to sign a contract within the
> next week that would allow the candidate to start with us on 1st September*
> .
>
> Key points for  the Board
>
> 1. W are proceeding on the basis that we are willing to swap equity for
> money with future investors (it is possible we only do a loan model but
> from discussions it seems like that equity investment will be a preferred
> option and this is also important to the CEO since removing this option
> would greatly limit his ability to raise money)
> 2. The CEO will likely get equity as part of the initial deal. We think
> this is good as it will align incentives and also reduce up front costs.
> The amount of equity is still being discussed but will be < 10%.
> 3. OKI will be keep a majority (or at least a voting majority) in the
> company
> 4. Engagement of the CEO will be as a contractor consultant until the
> point the new entity is actually set up.
>
> I emphasize: at this point no deal with investors is on the table but we
> want to outline some parameters now for how that will likely work.
>
> Putting together a full business plan and engaging with investors will be
> the first task of the CEO once he is in place. In addition, any investment
> deal will, of course, need to be approved by the Board.
>
> Current head of terms (still being negotiated):
>
> - Compensation of 2.5k euros per month pre-raise
> - Post-raise aim for an all inclusive salary of 90k euros (Berlin CoL)
> [Candidate currently Berlin based but willing to locate anywhere]
> - Equity position for CEO pre-raise to be agreed (probably around 2-5%)
> (note that, at this point, this will be "notional" in that no new entity
> will have been set up. I also note that we will agree reversion clauses
> whereby all equity reverts to us if no raise happens in an adequate
> timescale)
>
> Regards,
>
> Rufus
> --
>
> * Rufus Pollock Founder and President | skype: rufuspollock |
> @rufuspollock <https://twitter.com/rufuspollock> Open Knowledge
> <http://okfn.org/> - see how data can change the world **http://okfn.org/
> <http://okfn.org/> | @okfn <http://twitter.com/OKFN> | Open Knowledge on
> Facebook <https://www.facebook.com/OKFNetwork> |  Blog
> <http://blog.okfn.org/>*
>
>
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>
> --
> Jane Silber | CEO | Canonical
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-- 

*Rufus PollockFounder and President | skype: rufuspollock | @rufuspollock
<https://twitter.com/rufuspollock>Open Knowledge <http://okfn.org/> - see
how data can change the world**http://okfn.org/ <http://okfn.org/> | @okfn
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