sheets, for example. All things considered, I certainly can’t fault the outcome,
but I made mistakes along the way.
The VCs did come in 2 weeks after we took the money and said they wanted
to replace me as CEO, which was interesting. I was pretty wrapped up ego-wise
with the company. When you start a company, it’s your life. So you think you are
the only one that can run it. You think, if you’re not around, it will fall apart—or
at least I did—for all of these things. It was very difficult for me to separate
myself from the company in that way. So there was a fight over that for quite a
while before I acquiesced, and we brought in a new CEO. It turned out that
that was very good for the company and, had I been more mature, it would have
been a less painful process.
Livingston: You worked at Sun before the startup, right?
Fletcher: I got to Sun via the acquisition of a startup I was working at, called
Diba.
Livingston: So you had some startup experience.
Fletcher: I had worked at a couple of startups as an engineer before.
Livingston: But you didn’t have any mentors?
Fletcher: No. My parents are a fantastic resource; they were both managers at
IBM. But, we were all flying blind. You look at a term sheet and it talks about
vesting schedules for founders stock, and you have no idea what you should
expect and what you should negotiate for.
Livingston: How did you feel when the VCs said they wanted to replace you as
CEO?
Fletcher: It was jarring. I think there was bad behavior on all sides. During the
whole funding process they said, “We’re interested in you guys because of your
management team; we think you’re fantastic.” I’m on the phone with David
Wetherell, head of CMGI, and he’s saying, “We’re making the investment
because we believe in the management team.” Two weeks later they pull me
into the office—before even the first board meeting—and say, “We want to
replace you as CEO.”
Looking back, I can absolutely see why they would want to do that, because
I was not a good negotiator with the term sheet and I’m sure they could see
that. But I was so wrapped up in it at the time, it was very difficult. The good
news is that we did bring in a new CEO, he did get us acquired by Yahoo, and
things turned out wonderfully. So there are no complaints.
Livingston: But maybe there should be more open discussions between management
teams and VCs?
Fletcher: Well, always. I’ve been dinged as having poor communication skills,
which I’m certainly guilty of. But what nerd isn’t?

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• sheets, for example.