I am a boring civil servant. My wife Florence, in contrast, has been very adventurous since a very young age. After we tied the knot 5 years ago, she has since completed a PhD, become a mother, and founded a start-up. I am just glad I got to be part of it and had a front-row seat during all this time.

The startup

Florence was pursuing a PhD when we got married 5 years ago, and she took a year off when pregnant with our daughter. During a sleepless night nursing the newborn, she and her friends decided to found a startup, focusing on helping the disabled. (Some background: Florence had been working for nearly a decade as an industrial consultant and industrial engineer before pursuing her PhD in engineering, so it’s not some start-up fads that seem prevalent at that moment.) Thanks to her previous work in a quasi-government organization, Florence was familiar with the funding support available from the government and other agencies, and she was able to secure funding from the Technology Start-up Support Scheme for Universities (TSSSU), amounting to a little more than HK$1 Million (~US$150,000) over 3 years.

Of course, like many other government funding schemes, there were pre-defined scopes of funding and the majority of the funding was reimbursement-based, meaning that you would need to spend your own fund first before getting it paid and the whole reimbursement generally takes anything from 6 months to a year.

Any funding at this stage is useful, but a cost-reimbursement grant and the subsequent paperwork do limit the impact on the startup. After all, with 2 of the other 3 co-founders in the last year of their PhD and the remaining a Research Assistant Professor at a university, Florence was the only one spending any meaningful time at the startup, and she was looking after a newborn at the same time!

Dealing with government paperwork was a nightmare. Forms after forms after forms; two, three, five quotations required for purchase above arbitrary thresholds; exacting format for the list of expenditures and receipts, emailing a softcopy AND submitting a hardcopy of your accounting documents to the office within one week after the quarter ends, the list goes on. It was and still is, a massive drain on business time, but especially true when it was a one-man team and for a relatively small amount of reimbursement grant.

Things started to go south quickly after the grant was approved.

Long story short: There were four co-founders with equal shares and Florence was the only one who spent any time on the company as she took a maternity break from her PhD. Two of them, including the research assistant professor (OK, it’s really just a glorified post-doc position, but still!), were only interested in getting laptops, iPads and other gadgets for “research purposes”, whereas Florence and Steve, the remaining co-founder, wanted actually to do something meaningful.

An ugly power struggle ensued, with the professor tried to lead a coup against Florence. This led to a stalemate. To break the deadlock, we went back to the shareholder agreement signed during founding the startup to find a way out. To our horror, the canned document did not actually cover the scenario when there was a deadlock between shareholders.

The only solution it seemed at that time was to dissolve the company and each shareholder to go their own separate way after dividing the company asset among them. But this would likely leave Florence’s reputation in tatters and unable to get another funding ever from the government.

Luckily for us, we were able to get hold of some damning evidence against the glorified post-doc, with him impersonating Florence in email for his other business venture. Due to his carelessness in covering his track, we were able to obtain the IP address from the email provider and it all pointed back to him. He was confronted during an EGM, ironically, called by him and even managed to get his confession on record. With the threat to report him to the police and the university for his misconduct, the crook left the startup with his tail between his legs. His crony soon followed suit. Unfortunately, capital which would be useful for the company was wasted on legal fees and despite he was in the wrong, we were advised to give back the fair share of his capital in return for his shares and resignation from the board of directors.

This episode was pretty stressful and lasted a few months, but it did lead us to a far better future and taught us a great deal on the uglier side of startup. In the end, we were just glad that it happened early in the journey and we escaped relatively unscathed.

Lesson learned: I know it’s a cliché, but only work with people with integrity, and always get the shareholder agreement scrutinized by your lawyers if you are co-founding. A canned document sometimes just not worth the paper it is writted on.

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I am going to use this blog to record what I saw in my wife’s startup journey. The startup is actually more than 2 years old now, but we also have a spoilt 3-year-old insisting on “sharing” my laptop whenever I go near it.