Did they really pose it to you that way of take the 3% or they'll torch the company? Was it just a bluff because they'll own nothing too? I would talk to a lawyer and possibly the seed investor, but the lawyer first.
The seed investor is remaining neutral. It's not so much that they'll torch the company. They're just saying they don't have the cash so need to reduce my stake. They will budge on the 3% I'm sure, but I don't value the equity much if I'm not involved. I'm not too sure what a lawyer would recommend at this point? I also can't really afford one personally - especially as I may be out of work soon haha..
Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
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Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#42Did they really pose it to you that way of take the 3% or they'll torch the company? Was it just a bluff because they'll own nothing too? I would talk to a lawyer and possibly the seed investor, but the lawyer first.
The seed investor is remaining neutral. It's not so much that they'll torch the company. They're just saying they don't have the cash so need to reduce my stake. They will budge on the 3% I'm sure, but I don't value the equity much if I'm not involved. I'm not too sure what a lawyer would recommend at this point? I also can't really afford one personally - especially as I may be out of work soon haha..
If you don’t value the equity, offer to sell it to the seed investor at a discount.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#43Can you expand on why they want you out and what happens if you stay?
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#44Why does your co-founder want you to leave?
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#45Question is how replaceable are you. (Sadly, most people are.) If the plan is a funding round, they'll need you or a new technical cofounder (they may be replacing you anyway?), they'll need equity to represent that. good news there is they want someone proven or harder to raise. The founder may also be wanting to keep > 50% after funding dilution.
I'd stretch it out 1mo till you got your cliff, so you get your 5% or whatever vested locked in. Then I'd try to figure out why the reln is broken, and if you truly want to stay / can fix it. Negotiation wise, I'd assume you are leaving, and maybe they are playing hardball. Asking for a buyout doesn't work as they are cash poor, and keeping too much equity doesnt bc they can just fire you. they may also decide to wipe you out after you leave by issuing more stock to remove dead weight on cap table.
Maybe: Offer to stay on until you help get a good replacement at 90% efficacy, and keep vesting at high rate, then leave. Say you are good for partial buyouts during the next rounds.
if you have single trigger, you have way more leverage. if a success 10yrs / 1000 employees / $1B from now and you leave now, you'd have contributed little of the ultimate work, and your equity & departure more of a hindrance during fundraising, so leave it w even 5-10% now is fairish.
edit: I would discuss w a startup lawyer. if you break the reln now w money still in trust of the untrustworthy ceo, like equity to sell at next rounds, you may want extra protections on it, like conversion dates to something more liquid.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#46Just because your co-founder just now feels like "working on it alone" doesn't give him/her the right to force you out, specially if he or she doesn't have any leverage (as you say, the investor is remaining neutral). So what is preventing you from just saying "no, thanks, I'll keep my 40% and keep working on this". What would he/she do, then?
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#47Hold out. Keep working and keep proof you are working and do what is required to keep your stake. Don't give them anything that could be used to justify firing you or the upper hand in any legal battle. Keep any evidence of them violating the contract. Try to get the upper hand in any negotiations. You'll get a better deal at the very least
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#48I suspect there may be other personal/personality issues here and he may well like the idea of hacking alone on this, now that it appears to be viable. However, he has an agreement with you, and you made commitment, put in effort too. That's why you have a shareholding.
Do not just give that up, unless he makes it worth your while 'now'.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#49Did they really pose it to you that way of take the 3% or they'll torch the company? Was it just a bluff because they'll own nothing too? I would talk to a lawyer and possibly the seed investor, but the lawyer first.
The seed investor is remaining neutral. It's not so much that they'll torch the company. They're just saying they don't have the cash so need to reduce my stake. They will budge on the 3% I'm sure, but I don't value the equity much if I'm not involved. I'm not too sure what a lawyer would recommend at this point? I also can't really afford one personally - especially as I may be out of work soon haha..