The Real Cost of Selling One’s Soul

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I heard from a friend that he recently sold his start-up business after years of building it to do just that.

Wow!  I was so impressed!  “Take a break!” I replied. “I can only imagine how much work that was and how much money you must have made!”

Yes, he told me. It was a LOT of work and he is exhausted. But, he confided, he really didn’t make much money in the sale.

What?? I was flabbergasted… Then I learned why. It seems that he and his partners, in order to raise the money they needed to make their business so enticing and salable, had given away most of the company to investors – first angels, then later venture capitalists – so that by the time they sold it and all those investors took their chunks of the profit, there was little left for the original idea guys who had started the venture. (ouch!)

It got me to thinking.

Over the years, I have been approached by businesses that want to “support”my work. The first time it was a pharmaceutical company that wanted to pay me to speak to patients diagnosed with the diseases their drugs treated, teaching those patients about empowerment principles, and (oh, by the way) about the great work their company was doing. The offer came very early in my patient empowerment career and I was really hurting for income. I was so hurting that I didn’t know if I could keep doing the work I wanted so badly to do! Their offer was extremely tempting. I gave it some serious thought…

But eventually I decided against it. I wasn’t willing to sell my soul to that pharma devil. I realized the income would never make up for the loss of credibility that would affect my future work. Making recommendations to patients about negotiating their journey through the healthcare system requires total objectivity, and letting that be influenced by pharma would dilute my message and reputation. These almost 10 years later I know it was one of the smartest decisions I have made.

More recently, I hear from businesses that want to support the work of patient advocates. They come to us with a variety of pitches, from wanting to supply tchotchkes for us to give to our clients, to underwriting workshops… One group offered to host our database on their servers (big $$ savings), another wanted to provide grants to help members get their businesses started.

In each case, like the one already described, the initial offer for money saved or earned can seem tempting! Until (usually within seconds) I realize the real “cost” to the organization – the cost of having to align the Alliance with the goals of the sponsor or supporter, whose goals might actually conflict with our reputation for objectivity.

I wouldn’t sell my own soul then. I won’t sell the Alliance’s soul today.

Here’s the problem. With the exception of offers from friends, family, or investors who aren’t interested in the promotional opportunities that support can bring (like my friend’s start-up situation), offers like these come from an individual or entity who hopes to gain some control over what the business stands for. They are looking for promotional consideration, hoping to pre-empt the objectivity of the work being done, and provide influence that may (or may not) be beneficial to the organization, its customers or clients.

Sometimes the control they expect is fairly benign. Maybe they want their logo to appear in the organization’s materials, or they hope to have a chance to speak to participants at an event. Short-term relationships, like advertising or a workshop sponsorship, can actually be beneficial. No problem….

Unless and until you begin to need that support for survival (like my friend’s experience described above). Once that happens, then future business decisions are based on what the sponsor expects or dictates, and not always what is better for customers, clients or (as is the case of the Alliance) members. At that point your reputation for being objective and open minded is in jeopardy – a hit you can’t afford to take. Just ask organizations like large non-profits that rely on pharmaceutical and device companies to survive. Whose drummers do they march to?

To be clear – there are sponsors and then there are sponsors. As long as the potential sponsor is not looking for promotional consideration that could be PERCEIVED to influence your work (as in, conflict of interest) – then there should be no problem at all. For example, it would be difficult to see any harm to your reputation if a local real-estate agent, accountant or financial advisor wanted to sponsor a talk you were going to give. It would be quite different if a hospital or lab/testing center wanted to underwrite your work and expected its logo would show up on all your marketing materials. How would potential clients view that? Would they worry that you could not provide objective advice about the better hospital for them, or the more accurate lab? Is that a risk you are willing to take?

I share all this today because I suspect offers will come your way from time to time. You may even go in search of support yourself.

If so, and if they are looking for promotional value from the relationship, and you seriously consider the possibility, then just be sure to weigh it against their expectations, and how that support could be perceived as influencing your work product – positively or negatively – in the future.

If your soul will belong to an unwelcome devil as a result, then don’t give into temptation. Just say no even if you are really hurting for money (like I was in my early days.) You’ll sleep better at night knowing you haven’t given up something so important to you and future clients. Your reputation for objective, patient-focused work will remain intact.

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Comments

  1. Stephanie Frederick  July 14, 2014

    Trisha, I’m starting a new business, and it qualifies as an L3C. L3C’s are a fairly new business structure that place social purpose over profit, and increased access to income, particularly through program related investments. It’s for a profit making activity that is organized by equity participating shareholders. There are 9 states that provide L3C registration, and if your state isn’t one of them, it’s totally legal to register in another state and also have an LLC registration for tax purposes in the state where you’re doing business. So, if you or your readers are not familiar with L3C’s, I encourage you take a look at it. Thanks for your post!

    reply
    • Trisha Torrey  July 14, 2014

      Stephanie – very interesting concept so yes, I did look at it more closely. I learned that creation of L3Cs sprung from the concept of social entrepreneurism. Since I’ve always considered myself to be a social entrepreneur, I was so pleased to know that it has actually be quantified this way. Thanks for letting us all know!

      It seems like the point of an L3C is to allow for for-profit company that has been established to improve a social problem (healthcare, or immigration, or education, or any social problem) – to accept not only private investments, but also grants or donations that we usually think of as non-profit revenue streams.

      To be clear, though – a corporate formation, no matter what that formation is, social or otherwise – does’t remove the temptations of accepting support from entities that would be perceived as a problem for your business (as described in this post). It strikes me that one of the biggest benefits to formation of an L3C would be that the entire group of investors would discuss such alliances and could flesh out the positives and negatives before making a decision.

      An informative comment – very much appreciated.

      Trisha

      reply

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