>can we at least agree that is uniquely shitty to suddenly level these claims days after the acquisition is announced?
Would you prefer that he wait until after the acquisition closes and then have to fight a multi-billion dollar corporation and a newly minted billionaire cofounder? He obviously feels he is owed something, and strategically, it was now or never.
I cofounded a company, named it, was listed as the inventor on the company's patents, wrote its first product, had a written equity deal, and still got screwed on an acquisition like this. It wasn't for billions, but it was for more than $60 million. The acquirer was a multi-billion dollar company and once the deal was done (I didn't find out about the acquisition until after the fact) it was impossible for me to fight them.
I don't know what the merits of his case are, but looking at this from Jeremy's side, having been similarly positioned, he had no choice but to do this right now. Once GM has the company, unless Jeremy has some insanely wealthy backers willing to fund a very expensive legal fight for many years, all bets are off.
"He obviously feels he is owed something"
Does he feel he is owed something just now? Why didn't he feel he was owed something at their sizable Series A [1]? It all just seems Opportunistic, someone just waiting to maximize their returns.
Again, I don't have any insider knowledge here, but: you pick your battles. After the sizable Series A, the company was still going to potentially fail, and thus it may not have been worth Jeremy's time to fight it. Here, it is clearly worth his time. Spending a ton of time fighting for a small amount of nothing is clearly not worth it for anyone, and thus he may have chosen not to fight it until now, when it's clearly not worth nothing.
I find that business is opportunistic in general, and those who are successful are generally opportunistic. To constrain oneself and to not take advantage of opportunities likely means your going to get beat by those that do.
> I meant opportunistic in the "You knew you had no leg to stand on but are now trying anyway because the stakes are higher", sort of way,
This fully describes most of the VC-backed startup world. 95+% of the businesses fail and a few get lucky. Part of making that happen is trying just about anything and shooting for the moon.
What exactly was he waiting for? Hedging his bets? I get that this may be legal, but he seems to have only become interested in his stake because it might suddenly be worth something (alot). I'm actually surprised he's not worried that his sudden claim might not cause enough problems to lower it's value, i.e. scaring off GM.
Keep in mind you're talking about Kyle Vogt, cofounder of Justin.tv and Twitch.tv, acquired by Amazon for $1B, and Socialcam, acquired by Autodesk for $60M.
I guess he probably isn't a billionaire if he only got a percentage of those acquisitions but he isn't some poor college kid hacking away in a garage either.
Note that I am not saying anything about the merits of this case one way or the other, just pointing out who we're talking about.
The question is not why didn't he wait until after the sale closed. The question is why he didn't bother to come forward and ask for his equity at any point during the previous 2 years.
Yup, and the whole point of doing it right now is that it gives him the most leverage. No one wants to stop the merger and the longer you wait, the more risky it gets (buyer's remorse, another startup comes up with a competing product, etc.) so you might be willing to pay a small but substantial sum to make the problem go away.
Given he didn't take the offer of a sum to make it go away and instead let it drag longer in a way which affects the merger, either that wasn't his logic, or he executed it poorly.
Fair point, but from the way Sam wrote it up it sounds like he ignored them and let it get far enough that they filed a suit against him, whereas if his plan was to be something they can get rid of quickly before the merger he surely would have come to the negotiating table before it became too late.
Would you mind sharing a bit more about what happened to you with your startup?
Were you due millions and got nothing, or did you just lose some of what you felt you were due? What would you suggest others do in order to avoid that situation of yours?
I lost nearly $13M in equity. I got $0, plus I spent most of what I had at the time trying to pursue it legally. Basically, my business partner (who was already very wealthy before we started the company) and I had a personal falling out (believe it or not, over a woman). He decided that since he had financed everything, that it was his. He pushed me out, but I still had my equity.
It turns out, however, that the moment I was out he transferred all of the company's IP to a different corporate entity that he owned 100℅ of (same exact company name, just a different structure). He eventually sold that entity. The only thing he couldn't erase was my name being on the patents, but apparently the acquiring company never bothered asking who I was. But in the end it didn't matter, I simply didn't have enough resources to see it all the way through.
I'm really interested by these kinds of IP transfers... is there any reading material about them? This is not the first time I've heard of them, it sounds like one of the only viable ways of removing shareholders that you don't want in the company.
But it also sounds batshit crazy... shareholders should have more than just 'trust' that a founder isn't going to screw them over so easily.
It is of course actionable, but that assumes that everyone involved is on equal financial footing. Me, independent developer, vs a $13.65 billion market cap company and a cofounder worth more than $100 million usually won't end well no matter how egregious the conduct was.
You can hire lawyers on a contingency basis, which means they don't get paid unless they win. Typically they want half of the settlement money. $7 million dollars is still a lot, and it could be more if there are damages.
I know someone who went up against a Dow 30 tech company like this, won $8 million, and walked away with $2 million after tax. Let me know if you want more details, I'll email you.
Yeah, I made that post out of frustration. After that post I start putting personal and borrowed money into it that I couldn't afford to lose at the time, and nothing came of it. Complete stonewall. The additional details I offered above (the transfer of the IP to a different company bearing a similar name etc) came out as a result of the legal leg work that was done, but I couldn't afford to pursue it further, and now the statue of limitations has long passed.
So yeah I wasn't going to name names, but since you posted this old link, in my opinion, no one should ever do business with Allan Camaisa. He is the CEO of a different tech startup today in the mobile space, and I can only assume he is screwing people both inside and outside the company in the same way and possibly new and improved ways.
If you would like to see the ire this guy inspires in business associates, look no further than http://eyevelocity.com . This was a dot com era implosion that he was the CEO of. Allan blew through $40 million of "smart" money - Intel Capital, Chase H&Q, etc. and the company went bankrupt. A spurned employee bought the old domain and 15 years after they blew up is apparently still bitter based on the home page lol (HTS was the parent company of Eyevelocity). His very next venture after that disaster was the one we started together.
Would you prefer that he wait until after the acquisition closes and then have to fight a multi-billion dollar corporation and a newly minted billionaire cofounder? He obviously feels he is owed something, and strategically, it was now or never.
I cofounded a company, named it, was listed as the inventor on the company's patents, wrote its first product, had a written equity deal, and still got screwed on an acquisition like this. It wasn't for billions, but it was for more than $60 million. The acquirer was a multi-billion dollar company and once the deal was done (I didn't find out about the acquisition until after the fact) it was impossible for me to fight them.
I don't know what the merits of his case are, but looking at this from Jeremy's side, having been similarly positioned, he had no choice but to do this right now. Once GM has the company, unless Jeremy has some insanely wealthy backers willing to fund a very expensive legal fight for many years, all bets are off.