This is the other Moviepass news of the day. A disgruntled board member called it quits today.
Carl Schramm who is an economist and is mostly an academic but also masquerades as an entrepreneur pulled the ejection button on HMNY.
In a bit of twisted irony he is currently writing a book called “Burn the Business Plan: What Great Entrepreneurs Really Do”
Maybe he became a little disappointed with the process of entrepreneurship – Teddy and Mitch gangster style. Who knows?
It was well known that Schramm was on the outs with Ted and others on the board. He was a swing voter, and he was getting pulled in both directions, he didn’t like it, And he did not like the potential damage it was doing to his reputation.
When things are really tough, being on a board sucks! I know as I have been there! What people don’t really understand who have not done these roles is that board members can often end up as enemies of the current management. When things go really South, like they have for HMNY, the board gets the blame, even if they disagreed with management’s strategy. Even worse for BOD members, they risk getting sued- PERSONALLY! That’s right, if you sit on a board, and the company gets sued, you can have personal liability. This is why most companies buy BOD insurance, to protect board members from this risk.
Schramm did a nasty by quitting in a huff and throwing management under the bus for withholding information. This could be interpreted in a couple different ways.
- Schramm was simply doing some CYA to protect himself in these lawsuits underway
- The Management didn’t like Schramm and purposely made it difficult for him to provide input. This happens a lot with BODs. Emergency board meetings get held all the time when a company is in crisis. These are busy people with other jobs so they might miss a meeting. The board needs only a quorum to hold and meeting and vote, so it is possible to dodge BOD members who might disagree with management, and seem to be a pain in the ass.
Whatever the reason that Schramm left, it is unusual for a BOD exit to carry a fire bomb with it. Schramm will likely not get an invite to as many board seats as a result. Quitting in a public huff rarely achieves the desired results.
It may well be that Schramm took a run at getting Ted out as CEO. He knows that Ted is now a liability for getting better funding options for the company. Put simply, there are plenty of banks that would lend money to HMNY if wipeout Ted was no longer in the picture. My sources tell me that Schramm was well aware of this, and was the only one who could potentially sway the board.
Looks like Schramm lost that battle.
I look forward to reading Schramm’s book when it comes out. Certainly Moviepass must be an excellent case study for “burning the business plan”!!!!
It’s also important to note, Schramm did not sit on the Moviepass BOD, he was on HMNY board only. He may have thought Moviepass was a bad idea from the get go, we have no idea really.