alt Hacker NewsThat's exactly the approach. Seen many deals where the (remaining) founders get a big slice of new vesting options or reverse vesting shares as part of a recap or semi-distressed round.
Nothing illegal about it when the company needs the money, just one investor can write the terms they want, and the founders are on board with the plan.
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newsclues • last Saturday at 8:59 PM
But it sounds like the ford v dodge brothers cases that most abuse as an excuse for corporate profit maximization.
A company should not work to enrich some shareholders at the expense of others
I understand that, particularly in a down round, investors can push to get more. What I don't understand is what allows founders to get a side deal. It seems like that would go against fiduciary duty to common shareholders and earlier rounds.