Co-founder pushed out · shard-db HN Explorer

Get a lawyer.

That situation is actually covered in a short little book, Dead On Arrival. Basically, a legal threat by you would make that company difficult if not impossible to fund. DOA.

https://www.amazon.com/Dead-Arrival-Avoid-Mistakes-Start-Up/...

That and you should get a lawyer.

[dead] kjs3 9y ago ↗

Lawyer up. An agreement by email is still an agreement, but it will need to be defended. Preserve all emails and any other evidence of your contributions to the company. Expect "not due to performance" to turn into "totally due to terrible performance" as soon as things get hot. Know that a lawyer costs money and you should think about the tradeoff between that cost and the value of the equity (which may or may not have any value down the road). Holding out for your full third share might not be better than accepting a quickly negotiated 25%. Or less, depending on a realistic future value of that share. Don't make it personal.

But mostly, lawyer up.

Weelunk 9y ago ↗

Thanks, CalChris and eric. A lawyer I have but not one versed in these situations. He is happy to sue (he's a lawyer) but are there any other insights from the book on how to leverage the situation and maximize my % or what is a typical settlement? Thanks again.

brudgers 9y ago ↗

The more you take out, the more you litigate, the less likely the company is to succeed. Maybe that's your goal. Maybe it isn't.

My advice is:

0. Realistically assess how much money is actually involved right now and what the odds are that it is significantly more at some future time.

1. Think about what you really want and then act upon it.

2. Realize that a nasty legal fight is going to suck up your energy and time.

[IANAL]

It does not matter what a typical settlement is. It matters what happens in this particular context, with the particular people involved, at this particular time.

If you have a realistic current valuation of 1/3 ownership that discounts future value for time and risk, one option is to negotiate a buyout toward that value. This allows you to walk away.

If the realistic current value is zero or close to it (i.e. significantly less than a few or one hundred thousand dollars), maybe it is worth sitting tight beyond minimal actions that clarify your claim and seeing what happens over the next few years. If the stake becomes significantly more valuable, then it might be worth a nasty legal fight. It probably won't.

Essentially, the big decisions are

1. Whether to play long term or short term.

2. Whether destruction or success is the preferred outcome.

3. Whether to look at the pie as finite size (in thirds) or potentially huge -- a tenth of a unicorn is a lot of meat.

I had a somewhat parallel experience many years ago. One day, in the midst of it, I decided what kind of person I wanted to be. In that sense it worked out well.

Good luck.