201–210 of 435 posts
Also talk to the investor, I'm sure they would rather not see their 100k be worth nothing because of a founder breakup.
Don't take any bad offers, you don't have to sell.
On the other hand if you are the one that is worth firing and you know this, do the honourable thing.
Earlier quoted context omitted.
It's not OP's ask! Please explain more what you mean about the valuation being underwater. I don't understand how that is, nor how that is even possible.
The investment was at a $1 million valuation and the company currently has 40k cash + allegedly, the possibility of 60k/year from ads. Unless there is significant growth potential, the net present value of the company is much less than $1 million.
Earlier quoted context omitted.
I disagree - keep the 40%, this will at least force them to come to you with why they want you to leave. The obvious answers are - they are a jerk to work with and they won't admit it - you are a jerk to work with and they won't tell you - something else If it's something else and there is real money at stake both of you should be able to work something out. Otherwise it's one of the first two - which is much harder…
Just to clarify, this person doesn't have 40%. They currently have 0%, and their agreement states they only get 40% if they work there for 4 years. Also, I don't know for sure, but I imagine they know the reason (even if they don't agree with it).
Earlier quoted context omitted.
I disagree - keep the 40%, this will at least force them to come to you with why they want you to leave. The obvious answers are - they are a jerk to work with and they won't admit it - you are a jerk to work with and they won't tell you - something else If it's something else and there is real money at stake both of you should be able to work something out. Otherwise it's one of the first two - which is much harder…
What "40%"? The entire point of the vesting agreement, bog standard in every competently run startup, is that he doesn't have 40%. In fact, if he's leaving less than a year in and his partner has the contractual authority to sever his employment, what he actually has is zero.
FWIW that's only true if he was being paid at least minimum wage. Otherwise he would be entitled to some equity even if he didn't hit his cliff.
Can I give you some advice that really sucks? Walk away. It's not fair, but starting a company isn't like getting a job. It's a relationship and a risk that doesn't always work out. Sometimes you find more money and success than you could ever dream of, and other times you waste 11 months. Here's my thought process. You and your cofounder aren't going to be able to work together after this. The company has no money a…
I disagree - keep the 40%, this will at least force them to come to you with why they want you to leave. The obvious answers are - they are a jerk to work with and they won't admit it - you are a jerk to work with and they won't tell you - something else If it's something else and there is real money at stake both of you should be able to work something out. Otherwise it's one of the first two - which is much harder…
Wasting 3 years is not worth the time. The Op should eject and focus on building something else or the same thing with a new co-founder.
There’s one advantage of this: You can start from scratch, build it faster, and better without starting with a baggage. And, have fun doing it. I’ve done this, and couldn’t be happier.
Business I left is nonexistent anymore.
Earlier quoted context omitted.
This is a partner we all agree is ruthless enough to terminate a productive partner prior to a cliff, but somehow either lacks enough clue or holds on to just enough ruth not to be able to simply fire the partner before the cliff elapses. They probably don't have to accept a deal in order to be terminated.
Ok, but he already has nothing to lose, right? I had the choice between accepting a pittance, or forcing the other person to take actions that would make them possibly legally liable, then I'd choose to force the other guy to take on the legal liability. Because if they were to fire him, then they'd basically have to fire them like a week or 2 before his vesting cliff, with an establish history of an attempted negoti…
* The 3% he's been offered, which while paltry compared to the 40% he had if things had gone better is still not a small amount of equity to hold in a successful company.
* Many thousands of dollars in legal fees.
* Many months of effort and stress.
People on message boards have weird ideas of what does and doesn't constitute lawful termination. Hiring in the US (I'm assuming this is the US, because there was a $100k investor) is at-will, most especially so in companies documented carefully enough to have 4/1 vesting. There is likely no such thing as a "bad faith" termination; there is only termination authorized by contracts establishing who manages the company, and termination that isn't.
Again, by all means, pay a small amount of money to get a competent lawyer to verify that's the case. Everybody on this thread will likely say "go ahead and fight" if it turns out this person can't be fired, so you can just stick a pin in that thought and we can continue to discuss the more realistic scenario.
Threatening to sue: also often a bad idea! If it's not credible, and everyone knows you don't have the resources to litigate, and that even if you did it would be economically irrational to do so, then the threat does the opposite of gain you leverage; meanwhile, threats can trigger other legal problems for you. Advice I'm pretty confident in giving: don't trust a message board post that tells you to threaten legal action.
Earlier quoted context omitted.
Just to clarify, this person doesn't have 40%. They currently have 0%, and their agreement states they only get 40% if they work there for 4 years. Also, I don't know for sure, but I imagine they know the reason (even if they don't agree with it).
It's a little more complicated than that. As they described it, they own 40%, but if they leave early the company has the right to buy back certain numbers of the shares at the original price. The one year cliff suggests that at this point, the company can buy back everything, but in another month, they will have 10% that's not touchable.
Earlier quoted context omitted.
Your theory of the case here being that this company has managed to find a set of contracts that establishes 4/1 vesting and enabled a seed funder to invest $100k, but somehow didn't designate any officers of the company or any authority to terminate members of the company. It could happen! They might reasonably spend $400-$500 figuring that out.
Let them do it then, so the blood can be on their hands. Otherwise the story is "tech co-founder walked away because he couldn't keep up".