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Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
391–400 of 435 posts
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#392Earlier quoted context omitted.
I know you mean well, but this could not possibly be good advice because there isn’t enough information in that post for even a lawyer to give good advice. You don’t know what’s In his contract. Maybe his cofounder can’t fire him. Maybe He could but that would trigger the vesting. Maybe he could put it to the board and fire his cofounder. Maybe his cofounders threat that it’s 3% or nothing is bluffing. It doesn’t rea…
I agree we don't know the whole story. But this is the version of the story that puts the OP in the best light, and still, my overall impression is it just seems like it's not worth it. What's the best case scenario they could get out of it? Maybe 6% equity, or maybe a $10k severance. But going after a company with no revenue and only $40k in the bank doesn't really seem like the best use of anyone's time, energy or…
Well, one possible case scenario is that OP’s contract does not allow his cofounder to fire him, or fully vests if he does. He can this tell his cofounder to pound sand and his cofounder will have to realize that his options are 40% or 0%. If he believes the company has a bright future, he’ll take the deal. There’s a very real chance OP gets much more than 3% or 6%.
Or there’s something better that I can’t think of because I’m not a lawyer who deals in this and don’t know the specifics.
It’s just bad to give really any advice here, which is part OP’s fault really because he should not be asking a lawyer rather than Internet randos.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#393Is it possible the investor is in cahoots with your cofounder? If so, then you may not have a strong position. Are you sure your cofounder is not screwing you over at the investor's behest? If it's not something that's (technically) complicated, your cofounder may be thinking of hiring in help to replace whatever value you are providing (i.e., you are fungible, he's not).
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#394Earlier quoted context omitted.
Depends on the terms of the agreement. In my case the unvested shares had to be returned if I terminated the employment or the company fired me for cause, but not if the company terminated the employment without cause.
I've had clauses like that too, as part of M&A, but haven't seen them in company formation docs. This seems like a thing you can discover quickly and relatively inexpensively.
Yea, this is called a "double trigger" and is often written into founder reverse vesting agreements signed during formation. The idea is that at first, you can be fired as per usual like any employee. But, if there's a significant change in control of the company (e.x. M&A of >50% of outstanding shares), then _one_ of the triggers has been met. At that point, if you're fired without cause, that's the second trigger and remaining unvested shares immediately become fully vested.
Of course, I've since learned that pretty much _anything_ can be re-worked in an M&A agreement -- "we're not buying you without striking this clause" -- so it's no silver bullet.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#395Earlier quoted context omitted.
Bingo! Now you know it’s BS. This really sucks. It’s not a good place to be. The fact that they won’t take a buyout from you means they are pulling a fast one and someone probably said “You know, it would look better if it was just you” somewhere down the road. Don’t sell, don’t give, don’t walk away. Stand firm. This was a binding agreement they can’t get out of. You have all the power here. You know you have someth…
>> It will pay off in the long run. For both of them if partner can separate head and ass.
Could one really re-establish trust at this point? How would you know things may not head south at any future point with a big outcome at stake?
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#396Earlier quoted context omitted.
Then they have established a lower bound on the value of their shares.
Bingo! Now you know it’s BS. This really sucks. It’s not a good place to be. The fact that they won’t take a buyout from you means they are pulling a fast one and someone probably said “You know, it would look better if it was just you” somewhere down the road. Don’t sell, don’t give, don’t walk away. Stand firm. This was a binding agreement they can’t get out of. You have all the power here. You know you have someth…
How do you figure NTF can't get out of it? Couldn't they fire TCF with the investor's cooperation?
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#397Earlier quoted context omitted.
Maybe it's just because I'm an outsider, but startup finance is complete nonsense to me. >Same goes for giving you the 40%... there's no way they can build a company when someone not involved owns a huge stake. This actually happened to one of my professors, which represents the opposite end of the absurdity. He started the company with a friend. The company pivoted to a completely different direction and the friend…
I don't think it's really a solvable problem. There's a very wide range of hard-to-predict outcomes, from total failure to massive wealth, with a lot of just-bumping-along-for-years scenarios. The value of money varies drastically over time. The people involved are generally novices. Labor and skill contributions are impossible to predict in advance. Social conventions and ties add more layers of difficulty. What eve…
Nicely put. Really hit the nail on the head here.
And if people are trustworthy, then you can figure out things even the mechanism can't account for.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#398Earlier quoted context omitted.
If he/she has these protections, they would not have posted asking for help. Truth is they likely have very few options, can be terminated any time the shareholder & founder want, and whatever shares they own will be diluted to 3% or less if they choose.
People are rarely aware of all the details of their contracts. I know that must sound funny to those who won't sign anything without reading it and understanding it but it is't rare at all for someone to be handed a 'standard' contract and signing it without fully understanding all the implications. Hence my first advice to hire a lawyer.
And that should have been 'isn't'.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#399Earlier 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…
> Instead, I would have an open, honest conversation, listen from a place of empathy and generosity and seek a compromise.
What kind of compromise do you think is available that treats OP fairly that can be gained by performing empathy, compassion, generosity, and active listening?
From the story told, it sounds like the poster might have tried that already.
Re: Ask HN: Co-founder wants me to leave but won't entertain a buy out offer
#400Earlier quoted context omitted.
I don't think it's really a solvable problem. There's a very wide range of hard-to-predict outcomes, from total failure to massive wealth, with a lot of just-bumping-along-for-years scenarios. The value of money varies drastically over time. The people involved are generally novices. Labor and skill contributions are impossible to predict in advance. Social conventions and ties add more layers of difficulty. What eve…
Nicely put. Really hit the nail on the head here. And if people are trustworthy, then you can figure out things even the mechanism can't account for.
Exactly. The contract is the skeleton. But it's relationships that put flesh on those bones.