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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

#371

Post by nickff »

AtlasBarfed wrote: post #363
nickff wrote: post #341

Earlier quoted context omitted.

NTF and investor can simply issue more shares under any number of arrangements; cap tables are not written in stone. If they have a hard time, they might also start a new company, and liquidate all the assets from the current company. Every ongoing business arrangement relies on goodwill and intent to survive, like any other relationship. Consulting a lawyer with expertise in the area may be a good idea, but the best…

If there are other employees, wouldn't this require firing all of them and invalidating their equity?

The closing and re-opening would invalidate everyone's equity, and open the door for a complete re-negotiation. Dilution usually hits people who are gone the hardest (as they usually get nothing out of the new option pool if there is one).

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#372

Post by adamsea »

piyushpr134 wrote: post #370
adamsea wrote: post #361

Earlier quoted context omitted.

Parent posters point is that the battle for control will end up being so toxic it will fuck the cake. Which seems like a valid concern.

so be it. He either gets to eat the cake equally or no one does. Not the bastard who doesn't even know how to make the bloody cake

How much in lawyers fees do you want to pay to fuck a cake?

Point being, as others have said, it’s essentially a negotiation. Not a war.

Plus, I guess if the guy really could fuck the cake that gives him leverage and a negotiating position. If he can’t, then it’s moot.

And as other folks also pointed out further down, OP needs good legal advice and, to determine when the cost in time and money ends up being high enough and the probability of a lucrative outcome being low enough that it’s time to walk away.

Knowing those things can help make good decisions.

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#373

Post by asah »

Sorry, that sucks.

Every situation is unique and I'm sure there's more to this, so I wouldn't seek or accept legal advice from HN (including me).

DM if you want a referral to a veteran silicon valley executive compensation attorney. That's the pro move, it's less expensive than you might think and results in a lot more long term happiness for all parties involved.

(I'm a veteran engineer myself and between myself and friends, lots of experience in these sorts of matters)

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#374

Post by piyushpr134 »

gkoberger wrote: post #117

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…

Best revenge would be to shut down the effing website and watch the other one go up in flames as non tech guy won't know how to switch it on. JK

This is very unsound and simp like advice. He has built it. If anyone walks away it is the other guy and not him

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#376

Post by lostcolony »

digitaltrees wrote: post #313
gonehome wrote: post #251

Earlier quoted context omitted.

Yeah - I don't see how people can tell them to just give up. Go scorched earth - what do you have to lose? Know the other guy is hostile and don't trust them to do the right thing. Consider your options outside of that and talk it over with the other investor. If you're the technical cofounder here you're probably in a stronger position to negotiate. If you can get the other investor to see what's happening here (you…

This advice will almost certainly result in no deal and leave all parties worse off. Instead, I would have an open, honest conversation, listen from a place of empathy and generosity and seek a compromise. The truth is, unless your cofounder has the right to terminate your employment, then continue working and try to create as much harmony as possible. Co-founder disputes are awful and usually result in the death of…

No. The co-founder is not coming into this negotiation seeking an agreement amenable to all parties, but rather to get their way. They are a hard bargainer (in the sense that they are attempting to push the needle as much to their side as they can, rather than find something equitable). They are the person coming in to the yard sale, seeing the sign that says "$5", and saying "I'll give you 30 cents for it".

You don't move the needle back by being kind and compassionate with those sorts of people. You move it back by using whatever leverage you have. We don't know what leverage the OP has, but his only defense is to use it to either trigger a real buyout, to get the other investor on his side, to risk tanking the company, to say "no" in the belief the co-founder won't tank the company in response, or some other option we're unaware of.

In the same way you won't make headway trying to explain to that lowballer at the yard sale why $5 is more than fair, you won't make any headway trying to explain to someone who has come out of the gate with something so starkly unfair as the OP presents why their proposal is unfair. They know.

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#377

Post by wdb »

fortydegrees wrote: post #33
gwbas1c wrote: post #23

Earlier quoted context omitted.

I think this works if fourtydegrees has some bucks in the bank. Reading between the lines, I suspect fourtydegrees is young and doesn't have the kind of money to do this. (I also suspect that lawyers may be out of fourtydegrees' budget.)

Suppose I did have some bucks in the bank and did get a lawyer - how would they help? So far my co-founder has been pretty unreasonable with regards to compromising and/or negotiaton. The investor so far has also been very neutral and I think will remain so.

Yeah, spend the money and a good lawyer. The 1000bucks I spend on a lawyer to send a you suing the wrong person letter to a company that’s now worth over trillion was the best money spend.

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#378

Post by gkoberger »

piyushpr134 wrote: post #374
gkoberger wrote: post #117

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…

Best revenge would be to shut down the effing website and watch the other one go up in flames as non tech guy won't know how to switch it on. JK This is very unsound and simp like advice. He has built it. If anyone walks away it is the other guy and not him

A lot goes into starting a company, not just tech. We don’t know who contributed what and how much. And I say this as a technical founder.

Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer

#380

Post by irjustin »

theptip wrote: post #357
nickff wrote: post #310

Earlier quoted context omitted.

The non-tech founder is likely CEO (as they started in, and likely got the investor on-board), so they can likely fire the TCF without a vote. The board, likely made up of NTF, TCF, and investor could then fire the NTF. In any case, this is not going to end nicely, and I would recommend walking away with whatever equity can be had without setting the counter-parties against TCF. If NTF and investor get really mad, th…

Wouldn’t firing the TCF (or any key staffing decision) require a board vote at this stage? Not to mention potentially being a breach of the NTF’s duty of loyalty to the shareholders if they don’t have a good business reason for firing them? In other words the NTF would need to have the investor on board to make that move. IANAL so interested to know how folks with more experience have seen this fact pattern play out.

The grandparent comment stated this. The TCF needs to make a case directly to the investor to show their worth and tell their side of the story.

It's not explicit this was done, so it's assumed it wasn't. If the TCF hasn't spoken to the investor directly, it's relatively easy to assume the investor will vote in the NTF's direction.

Lots of assumptions, but we don't have that much to go on.

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