Re:Ask HN: Co-founder leaving a startup for free without equ...
by MrDunham on Tuesday September 24, 2019 @11:02AM
(#21060925)
> "I'm probably wasting my time here"
Realistically, you've likely answered your question regarding if it's worth it to fight it out.
Then again, if you've signed docs that say you own X shares, then Jim can't just take those away (as the parent poster mentioned).
Jim could issue a bunch of new stock (watering you down), or (if it's an LLC/s-corp with pass-through income) generate a bunch of phantom income to drown you in taxes, or create a new corp and sell the IP from oldCorp to newCorp for a pittance (bit of a quagmire there as you'd have good grounds to sue).
All of these present challenges, though.
Your best bet may be to determine a transition period where, at the end, he pays you for your shares and you walk away. Your chances of staying as an equity owner given the capitalization of the biz (~$1000, if I understand correctly, as his $12k was spent outside of the biz).
Of course, this should be in writing, signed, etc.
Re:Ask HN: Co-founder leaving a startup for free without equ...
by mickeyM on Tuesday September 24, 2019 @11:26AM
(#21061181)
Thanks a lot - that list looks kind of scary :) I'll definitely keep that stuff on mind. Yeah, now I see that it'd be really best to try to negotiate a walk away fee
Realistically, you've likely answered your question regarding if it's worth it to fight it out.
Then again, if you've signed docs that say you own X shares, then Jim can't just take those away (as the parent poster mentioned).
Jim could issue a bunch of new stock (watering you down), or (if it's an LLC/s-corp with pass-through income) generate a bunch of phantom income to drown you in taxes, or create a new corp and sell the IP from oldCorp to newCorp for a pittance (bit of a quagmire there as you'd have good grounds to sue).
All of these present challenges, though.
Your best bet may be to determine a transition period where, at the end, he pays you for your shares and you walk away. Your chances of staying as an equity owner given the capitalization of the biz (~$1000, if I understand correctly, as his $12k was spent outside of the biz).
Of course, this should be in writing, signed, etc.