1

I presently am doing part time work for a company that is privately owned that Venture Capitalists have invested in. My full time employer has invested in the venture capital firm and I was wondering if it is a conflict of interest. My full time employer is not involved in the management of the company what so ever but is an investor considered a business partner?

  • Are you doing this part-time work of your own accord and in exchange for a wage from that company (as opposed to your full-time employer)? – Upper_Case Jul 10 at 20:53
1

What you've described isn't completely unheard of, especially with startups which are somehow related to an established business. It can be very hard for a startup to find relevant talent in the early stage, as well as to have enough cash flow or working capital to pay full-time salaries.

The best way to handle this is for everyone involved -- both employers, and possibly even if the VCs if you're still at the Angel Investor level -- to be aware of the relationships. If the startup is still receiving money from actual angel investors (less than a few millions of dollars) they may feel good about the fact you're working for them part-time since you've proven you have the skills. Individual investors are a lot more attached to their own personal money than venture capitalists are to other people's money. If that makes sense.

There is a risk to both employers that you'll leave the full-time job should the startup be able to pay you. But again, that may well be what your current full-time employer hopes will happen and would be more than happy for you to do so.

-1

If anything, it is the opposite of a conflict of interest, at least as far as holding down two simultaneous jobs at different corporations gets. Your part-time employer wishes to succeed. Your full-time employer wishes for your part-time employer to succeed. In both cases, they would wish for you to serve the part-time employer well.

The issue with business partners is that money moves from one to the other. If one of your employers was a supplier to the other, for example, you might be tempted to manipulate the relationship inappropriately to the benefit of one or the other. In a case like that, the appropriate response would be to avoid being in a position where you could influence such decisions on either side, or be exposed to potentially exploitable information (recusing yourself as necessary). As it stands, no problem.

Of course, that could change. It's possible that your full-time employer will become a business partner as well (causing conflict of interest on their side as well as yours) or that you might see some ugly politics among the stakeholders in the part-time company. In that case, you could find yourself in a somewhat awkward situation, and need to start recusing yourself appropriately. Assuming all goes well, though, there's a good chance it won't be a problem.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.