Exit Strategies

Risk did not come easily to Patel. As an engineer, he was prone to decision making by matrix, rather than by instinct. Only one other person from Yahoo!'s core group of early hires had left to start a company. But since 1997, Patel and four friends have run the Round Zero forum, a roundtable discussion group that focuses on entrepreneurship. The forum started with the five founders chatting at Il Fornaio, the legendary Palo Alto restaurant where many a Silicon Valley business plan has been scribbled. Now, the forum attracts nearly 100 people each month. "Round Zero was sort of a metastartup for the five of us," says Patel. "It inspired me to attempt my own startup."

Patel had often flirted with the notion of declaring his free agency. But he shied away from it, thinking he wasn't ready. But by last November, he felt the pieces were in place. He had negotiated business-development deals for Yahoo! Classifieds, and arranged distribution deals for all Yahoo! products and services. He had watched Yahoo!'s meteoric growth -- to more than 2,000 people from a staff of merely 60 -- and he saw how the enterprise acquired and integrated companies. What's more, Round Zero had put him in contact with venture capitalists and investment bankers. He felt ready to call the shots.

But despite his desire to start something quickly, he didn't forget that a finish must come first. In all likelihood, some of his coworkers and business partners at Yahoo! would become his clients and colleagues. So here's what he did to protect his reputation: He gave one month's notice. In that time, he helped hire his successor. He drew up a road map for the client relationships that he had developed. And he shared his best guesses about where those relationships could lead.

"My team had just created a new group within Yahoo! and was relying on me for guidance, so I knew that two weeks' notice wasn't sufficient," Patel says. "I had been really happy at Yahoo!, and it was important for me to leave the right way."

Still, Patel doesn't feel as though he's leaving Yahoo! too far behind. He says he's now a part of what Yahoo! represents -- a spirit of entrepreneurship. He sits in the Spanish-style courtyard of Stanford University, a breeding ground for many of Silicon Valley's entrepreneurial successes, and wonders if the online-service company that he is building will one day be part of the Valley's business lore. But he had to start the Valley way: by donning his programming hat once again and writing code until 2 AM.

Coordinates: Nayan Patel, nayan.patel@onecenterplaza.com

Scene Four: When leaving threatens your hard-won business relationships

Protagonist: Patrick Lin, 34, formerly a principal at Robertson Stephens Inc.; now a managing director at E*Offering Corp.

In the cutthroat world of institutional investing, it's easy to burn bridges. The real test is whether you can leave and still keep those bridges standing.

Patrick Lin was one level away from becoming managing director at Robertson Stephens, a San Francisco-based investment bank that has led IPOs for such hot dotcoms as Egreetings and MapQuest. Lin had also spent several years independently coaching and advising startups, remaining on the sidelines instead of jumping into the game. He liked being the outsider, but he also wanted to experience the rush of being on the inside of a startup. "The world is changing, and I didn't want to have one role -- as a banker or a sales manager," he says. "I'm a coach and a relationship manager too."

Last February, Lin received a call from a managing director of E*Offering (which was at the time E*Trade's new Internet-investment group). Would he be interested in opening E*Offering's San Francisco office? Lin quickly realized that this was the opportunity he had been looking for. "My definition of failure," he explains, "is 'not learning.' I knew that having a chance to work at a new venture like E*Offering was what I needed."

He didn't consider E*Offering a competitor, but he realized that some of his current colleagues might. Given the confidential nature of major-league investing, he decided to leave immediately -- on the day that his new contract was finalized. Trouble was, his bosses weren't in the office that day. So Lin wrote a two-sentence resignation letter and left a voice mail saying that his decision wasn't personal. "Leaving abruptly was not the way I had planned to handle it."

That afternoon, Lin opened up shop for E*Offering in a 2,000-square-foot office, a far cry from the plush digs he had enjoyed that very morning. He bought a CompUSA fax printer, a Radio Shack phone, and some casual clothing. After all, a one-man office is pretty informal.