StabilityAI cofounder says CEO tricked him into selling stake for $100

Post by ipaddr » Fri, Jul 14, 2023, 4:49 AM UTC

TrackerFF wrote: post #74

cj wrote: post #7

I was chatting with a company who sold a large minority stake in their company to a well known private equity group (think 49%) with the explicit purpose of retaining control. Soon after the transaction closed, the PE firm was able to covertly buy another 2% of voting shares from a pre-existing investor in the company, which resulted in the PE firm gaining full majority control over the company, kicked out the CEO, r…

Small story on these kind of takeovers, but on a MUCH, MUCH smaller scale: Back home we have this small newspaper that's been going on for 25 years. It's just a small 3 man operation, and it's just a weekly paper that covers local stuff in our small county. Most of their customers are expats and older folks. When they started out 25 years ago, they raised funds by selling private stocks. All in all, there are maybe 1…

Post by grogenaut » Fri, Jul 14, 2023, 5:12 AM UTC

anonylizard wrote: post #125

NoRelToEmber wrote: post #100

Earlier quoted context omitted.

> A couple of years ago some of the leading media companies in our country (Norway) started consolidating "power" by acquiring small local newspapers all over the country. This sounds like it should be a pretty big story. "Extremely dangerous to our democracy." On the other hand, it also sounds like it wouldn't be.

The era of small local newspapers is long over. Its like saying buying all the libraries would be a threat to democracy.

Post by skrebbel » Fri, Jul 14, 2023, 5:48 AM UTC

preommr wrote: post #61

cj wrote: post #42

Earlier quoted context omitted.

Simple answer: A successful founder will sell 1 (maybe 2) companies in their lifetime, while PE/VC firms do these deals every day of the week. It's like entering the ring with a pro MMA fighter and expecting to have a fair fight. You have a massive disadvantage that can't be overcome. The best you can do is take precautions and "do your best" but "your best" and "precautions" still isn't good enough if your opponent…

> while PE/VC firms do these deals every day of the week That's why you hire a lawyer that also does this stuff everyday of the week.

Post by rompic » Fri, Jul 14, 2023, 5:59 AM UTC

slashdev wrote: post #75

khazhoux wrote: post #6

Odd story. The point at which you're selling your stake for $100, you've basically decided to give it away. Which raises the question: if he was just going to get $100 and nothing more, why not just hang on to it?

It's obviously not for the $100, that's just a small, round value to make it legal (some money has to change hands, even if just $1.) Likely the CEO explains that it's worth nothing, they're re-organizing things for such and such a purpose, and the 15% stake in the cap tables is an inconvenience preventing a possible deal. Please could you do us a favor and help us clear that from the cap table. I'm the kind of perso…

Post by tedk-42 » Fri, Jul 14, 2023, 6:11 AM UTC

iambateman wrote: post #144

bhouston wrote: post #124

Earlier quoted context omitted.

It is confusing what when on here. If you hired him then you have a contract. Fire him. And if he doesn’t leave or return bank accounts or money get the police to charge him with trespass or thief depending. Also he has probably misappropriated money so find that and claw it back.

It’s hard to explain, but it’s…complicated.