[foundation-board] CKAN Spin-out CEO

Tue Aug 18 09:06:18 UTC 2015

Thanks for the feedback. At this point this is a FYI to keep the board in
the loop (I also guess if someone had a huge red flag re proceeding with
the hire that would be acted on!).

If anyone did have any suggestions for improved metrics pre-raise those are
also welcome and I'll taken them into account when finalising terms now
(there will obviously be much more detailed metrics post-raise determined
by ourselves and the new investor). To reiterate right now we have targets
for raise time and we also have a clause where all equity reverts to us in
Q1 and Q2 2016.

Regards,

Rufus

On 18 August 2015 at 06:58, paula le dieu <paula at ledieu.org> wrote:

> This looks good to me. As with Jane not sure what you are looking for but
> can only add that raising money inevitably takes longer than anticipated.
>
> Regards
> Paula
>
> On 17 August 2015 at 17:47, Rufus Pollock <rufus.pollock at okfn.org> wrote:
>
>> 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
>>> Dir: +44 (0)20 7630 2472 | Mob: +44 (0)7899 891 943www.canonical.com | www.ubuntu.com
>>>
>>>
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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 <http://twitter.com/OKFN> | Open Knowledge on Facebook
>> <https://www.facebook.com/OKFNetwork> |  Blog <http://blog.okfn.org/>*
>>
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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
<http://twitter.com/OKFN> | Open Knowledge on Facebook
<https://www.facebook.com/OKFNetwork> |  Blog <http://blog.okfn.org/>*
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