The married couple who built Cisco took one venture check — and were pushed out of their own company shortly after it went public, a lesson one of them summed up as 'the investor is not your friend.'
The investor used control terms to remove the founders from the company they built — a betrayal, and a warning to others.
Outside management and capital were what turned a promising product into a durable giant; founder control had limits.
Co-founder and technical lead who built the core router technology; Lerner's husband. Resigned in 1990 after she was fired.
Co-founder who ran early sales/operations; fired in 1990 shortly after the IPO. Later a vocal critic of how founders are treated by investors and a successful entrepreneur (Urban Decay) and philanthropist.
Sequoia Capital founder who invested in Cisco, took roughly a third of the company and effective control, became chairman, and installed professional management — the counterparty in the founders' ouster.
Professional CEO hired by Valentine in 1988; scaled Cisco toward and beyond its IPO.
1 of 4 have put their version on the record.
The married couple found Cisco to commercialize the multiprotocol router, bootstrapping on personal credit and running the company hands-on.
Bosack and Lerner founded Cisco in 1984 and ran it hands-on. Sequoia invested in 1987, taking ~30% and control terms including founder vesting. A professional CEO was installed in 1988. Lerner was fired and Bosack resigned in 1990, shortly after the IPO.
The investor used control terms to remove the founders from the company they built — a betrayal, and a warning to others.
Outside management and capital were what turned a promising product into a durable giant; founder control had limits.
Unresolved: Whether the outcome was betrayal or a standard, necessary transition.
In her Inc. account, Lerner describes taking Valentine's money, the control terms, and being fired after the IPO — concluding that 'the investor is not your friend.' (Placeholder summary; full text at the linked source.)
Cisco completes a successful IPO, validating the technology and enriching the founders on paper — even as their control has already eroded.
Bosack and Lerner founded Cisco in 1984 and ran it hands-on. Sequoia invested in 1987, taking ~30% and control terms including founder vesting. A professional CEO was installed in 1988. Lerner was fired and Bosack resigned in 1990, shortly after the IPO.
The investor used control terms to remove the founders from the company they built — a betrayal, and a warning to others.
Outside management and capital were what turned a promising product into a durable giant; founder control had limits.
Unresolved: Whether the outcome was betrayal or a standard, necessary transition.
In her Inc. account, Lerner describes taking Valentine's money, the control terms, and being fired after the IPO — concluding that 'the investor is not your friend.' (Placeholder summary; full text at the linked source.)
That the founders were pushed out of their own company by the investor they had trusted — encapsulated in her lesson that 'the investor is not your friend.'
Sequoia's account frames the professionalization of management as what allowed Cisco to become an enduring giant — a necessary transition beyond founder control.
Fired 1990; later founded Urban Decay; philanthropist and author.
Resigned 1990; funded science/tech philanthropy and new ventures.