41–48 of 48 posts
Earlier quoted context omitted.
There's 0% chance someone who left early on would be able to hold on to 45%. They'd need some very heavy duty protections, and even then. The CEO, given their actions, would find a way to recover that stock later, probably at the behest of other investors.
They might negotiate something like 10-15% for just walking away though.
Keep the shares, its part of your passive investment portfolio now Check the operating agreement or bylaws, some changes require either unanimous vote or gives all distinct voters equal weighting regardless of percentage of the company
There are all kinds of sneaky ways to make his shares worthless. For example, issue 100x the existing share base, and distribute them to employees (as compensation) and sell them to existing investors (except him) at way under market rate.
I bet the same logic is how him and the CEO wound up with 50% to begin with
I bet it was the CEO that originally suggested varying percentages which was probably more correct and is now acting on it. The reddit post said they fought/debated over that.
I actually do find it offputting when founders are equal, it means they avoided/cant deal with confrontation or they have no idea how this sector works and just tried some out of touch pleb logic.
So yeah he is playing by a totally inefficient set of rules and got screwed
YC gives you a very modest amount of cash, thanks to the risks involved. It’s not really anything that should go to your head - if it does, that’s a red flag and something to be actively addressed because you’ll be dealing with larger amounts later on (if you’re lucky). This founder is from a LCOL country so the equation may be a bit different. Furthermore, even if YC valuation were sky high (which it isn’t), it’s no…
I forget where I read it (venture deals, perhaps?) but it has always stuck with me: founder stock should vest! Nobody should get any equity whatsoever until and unless they've been working full time on the project for a year or more, founders included! That wouldn't have solved the problem here, however, where blowing up the whole company is the best outcome, as you don't want to be in business with greedy, dishonest…
I forget where I read it (venture deals, perhaps?) but it has always stuck with me: founder stock should vest! Nobody should get any equity whatsoever until and unless they've been working full time on the project for a year or more, founders included! That wouldn't have solved the problem here, however, where blowing up the whole company is the best outcome, as you don't want to be in business with greedy, dishonest…
What about when some founders put in capital, say one founder puts in $100k? Do they still need to vest?
Sounds a lot like the "CEO" is a just sales rep for your company who did a great sales pitch to get you into YC, but who didn't even commit enough to the company to want to do it fulltime unless the person could get majority ownership. As others have mentioned, you might want to try to pull the business out of the company and get a better sales rep, with a more appropriate single digit or less equity. This kind of eg…
Yeah, it can really seem like "We closed a x-million dollar contract, we nailed it." But when you really take a step back, anybody can sell an x-million dollar contract. (reducto-ad-absurdem: I can find somebody tomorrow who would a ton of gold for 1-million dollars). The question to the salesman/ceo is --- did you sell a promise that can realistically and cheaply be made and maintained for under the sales price? If…
Some really emotional comments on here. Definitely an emotional situation but take a step back - If your cofounder fires you and you keep 45%, you're basically getting half the value for none of the work. Aside from the pride, this is actually very favorable. Probably the best way to handle it is to realize you own half of this thing, and offer to write a resignation letter to minimize the drama, swallow your pride,…
There's 0% chance someone who left early on would be able to hold on to 45%. They'd need some very heavy duty protections, and even then. The CEO, given their actions, would find a way to recover that stock later, probably at the behest of other investors.