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Comment by hoodoof | Hacker News Reader

It seems that the people who now own the company acknowledge that he was the cofounder but feel that "well he didn't do much, so he doesn't deserve his full shares".

The law doesn't work like that.

It's exceedingly strange to have had the initial cofounder depart and nothing was done to formalise the terms of that separation.

Also Sam seems really annoyed that this ghost-co-founder has turned up with this claim at the most inopportune time, and suggests that this is bad behaviour. I don't think so, it's the right way to play it. Wait until you have maximium leverage and then play your legal cards. The missing cofounder would have been a fool to play it any other way, thereby losing his leverage. The evidence that he has played it right is that so many people are running in circles desperate to resolve it - he has them against a barrel.

It appears the due diligence was pretty loose. Heads will roll.....

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> Wait until you have maximium leverage and then play your legal cards.

From the other version of events, in how Guillory presents it, there were no cards to play - he just assumed the entire time that he had a stake and when the acquisition came he got in touch to figure out how to collect his share.

I know it seems absurd that someone can sit back and not do any further work and expect to collect as much as the other co-founder, but it is a valid legal argument.

The onus was on the company to set out a legally sound and defensible separation.

"It seems that the people who now own the company acknowledge that he was the cofounder but feel that "well he didn't do much, so he doesn't deserve his full shares. The law doesn't work like that."

Exactly. The founding documents are controlling, unless later modified by a contract signed by the parties.

Well, what exactly are the "founding documents" in this case?

But there are no founding documents.

Apparently Cruise was incorporated by Kyle in September, before Kyle met Jeremy.

The founding documents explicitly list Kyle as the sole founder and shareholder of Cruise. If what you state is true then Jeremy's claim is entirely baseless.

This counter-complaint conveniently breezes past that fact, and moves directly on to allusions of a verbal contract, as memorialized in the YC app.

Founding documents aren't the only document through which someone can be given 50% shares. If you found a company on your own, and then give me 50%, and it is on paper with your signature and mine, I now own 50%.

It is more complex than than, someone may create multiple conflicting documents and the you need to resolve them by going to court to figure out how to resolve the conflicts.

Well, then the individual in question is liable for fraud, but that probably isn't the case here anyway.

...unless later modified by a contract ENTERED INTO by the parties...

Most types of contracts do not need to be signed.

> It seems that the people who now own the company acknowledge that he was the cofounder but feel that "well he didn't do much, so he doesn't deserve his full shares".

And, this seems a specious argument if we're to take the assertions in the complaint at face value (that he was forced out). At the very least, he was deprived of his opportunity to continue to participate in the company.

> Also Sam seems really annoyed that this ghost-co-founder has turned up with this claim at the most inopportune time, and suggests that this is bad behaviour. I don't think so, it's the right way to play it. Wait until you have maximium leverage and then play your legal cards. The missing cofounder would have been a fool to play it any other way, thereby losing his leverage. The evidence that he has played it right is that so many people are running in circles desperate to resolve it - he has them against a barrel.

It's the most lucrative way to play it, that doesn't make it the right way. The right thing is to come out into the open early and negotiate an equitable settlement at that time, not to wait to gotcha your former business partner.

If you owned a business and you thought you owned 100% of it- and worked on it for 2 years how would you feel if someone shows up at the end saying they actaully are 50% owners. And they never said a word about it the entire 2.5 years you were working on it?

You were marching along working your ass off thinking you owned X but someone else believed they owned half of X and didn't say anything?

Isn't that a bigger deception? I think under US law there is a concept where if you don't speak up and it leads people to bad assumptions it can be problematic suing later.

>>> someone shows up

Well, in this case, someone isn't some random dude from the Internet who you were never aware of. I understand your sentiment, but it doesn't apply in this case.

He worked there a month and at no point after leaving made any claims to ownership despite an equity round and several years passing. If you pretend for 2.5 years you don't own something and others take action based on that belief, is that not a worse deception? Would Kyle or investors taken the same actions if they had known they held half the shares they did? There is dishonesty in staying silent.

But, well, we can't assume that Kyle has totally forgotten about him, right? So he has quite a bit of responsibility for this as well.

While Jeremy's timing gives him the most leverage possible (and it's definitely not the most honest thing to do), we can't just treat him as the villain, especially without knowing the full story.

Jeremy filed a counter claim which was his very well written side of the story. Officially that's what a counter claim is.

Under the law if you knowingly allow people to proceed under false pretenses, it's harder to make a claim later. If it's true that Jermey never asserted the claim until now I think that's fairly damning - not just from an ethics standpoint but also legally.

Also I never said Kyle has no responsibility here. You are putting words in my mouth. I'm sure Kyle feels terrible and it's a sickening claim and counterclaim to read frankly but I do think it's sneaky to wait until the last second and I do think legally there are consequences for doing that if it's true for Jeremy.

Both sides have now told their stories in full and as well written as Jeremy's claim is- it's still a shakedown for cash for one months work. And a sneakily timed one at that.

> Wait until you have maximium leverage and then play your legal cards.

The Art of War highly recommends this approach:

    Attack him where he is unprepared, appear where you are not expected.

    Appear at points which the enemy must hasten to defend

The ideal time to get a legal dispute resolved is immediately prior to an IPO or acquisition event because these events tend to require that the company has no outstanding legal disputes.

I find it funny that people seem uncomfortable with facts like this. It's not emotional or bad behaviour, it's simply the rules. Everyone has to work within the law and the rules and it turns out that the law and the rules provide an ideal time for resolving such disputes - pre IPO or pre acquisition.

I'd be pretty uncomfortable with a senior manager or CEO who didn;t understand things like that - it means either that they will get caught out, or will not know how to win when the time comes to win.

But is it ethical?

What are you talking about?

I completely understand your question. But the fact that I do and that you asked it is kind of absurd, if you step back a bit. Just because things can be argued to be within the rules does not make them okay. I guess it hinges on: Are you refraining from crimes because they are against the law or because you think they are wrong?

I've always believed that hinges on your belief at the truth of your dispute.

If you truly believe you have not been treated correctly, and presumably that is the reason you are bring up the dispute, then the timing is just a tactic in dealing with the behavior of others. The timing might be the only way you can get your dispute resolved.

If you are pushing false claims then timing is just one more step in your unethical behavior. Liars aren't ethical in the first place.

Since when has that stopped anybody in this business?

Wow I hope no one ever founds a company with you.

Why? Im merely pointing out how the law works, and that if you want to win a legal dispute, do it when the opposing party has incentive (or better, a requirement) to quickly resolve the issue.

Not sure why pointing this out makes me not a good person to found a company with.

I have separated from a co-founder and I made damn sure we had an agreement in writing defining the terms of the separation. Didn't take much, no lawyers, just a one page agreement, three people each with a copy, all with signatures. All still good friends.

It indicates your attitude towards how one should act.

Obviously, one should act in their own self interest and use the law to it's fullest extent, not consider the social consequences of being a dick.

Good luck sir.

Being aware of risk angles and protecting yourself is not the same thing as condoning exploitative behavior.

I'd want my cofounder to think through how somebody with legal leverage over our company would act. You should want that too.

> I don't think so, it's the right way to play it. Wait until you have maximium leverage and then play your legal cards.

That sounds like condoning exploitative behaviour to me. Is that the sentence we are both talking about?

Which side is being more dickish in this case is still very much in dispute, which is why it's going to court.

You seem to be certain one side is looking out for their self interest much more than the other, which you have no way of really knowing because you are just another person commenting on a discussion on the Internet.

Unless you are personally involved in this matter, and know more than what has been publicly reported so far? And even then, how would we know you are not being biased in your judgments by your involvement?

The amounts of money involved make everyone involved pretty greedy, I don't understand why that's so controversial.

Ya'alls notion of "rights" is pretty disturbing to me.

So you are against anyone being compensated at the amounts under discussion?

Which is a coherent, defensible position. Sounded like you were selectively accusing one actor in this dispute as the "greedy" one, which I think is why you got so much push back on your comments.

Not against anything, just think it's fair to label those seeking large amounts of money as dick'ish and greedy.

If money is your goal great, more power to ya, but I'm gonna call you a dick and not want to work with you.

So you're implying that you'd never work with YC or Vogt or any of their investors? GM is spending $1B to acquire Cruise, which is a vast sum for a small company that has been around for 3 years. Even 20% of that would be a great payout for all involved, and think of how much money GM could have left over to continue to revive the dormant U.S. industry, and U.S. fortunes at large. By your standards, if YC and Vogt were ethical actors, they'd ask GM to reduce the offer, because building things and innovating is itself an honest reward.

> By your standards, if YC and Vogt were ethical actors, they'd ask GM to reduce the offer, because building things and innovating is itself an honest reward.

What do you need a reward for at all?

Why are you trying to build something?

By my standards, your motivation matters a lot, it sounds like you think people deserve rewards for doing things, I don't think that makes very much sense. Gold star you did the right thing, bullshit.

That's not how I want the law to work. We should strive for better

Because you're waiting to maximize your leverage and make a play for yourself. That's a bad quality in a teammate.

To you and everyone else attacking him, you're conflating his explanation with his personal character. That's not fair.

Tell that to Eduardo Saverin and the Winklevoss twins.

So is cutting someone out of a company. My point is that this probably became an emotional issue. If that's the case, it's not hard to see how someone would wait for an opportune moment to assert ownership.

But, since we don't really know all the facts, if this was a mutual parting of ways, then I agree that it's a terrible thing to do.

The bottom line is we really don't know what happened. I can at least see how a reasonable person could walk this path if they feel they've been maligned.

I think you can fire people without it making you a bad founder. At least, I hope so.

And I think you can demand the compensation you believe is legally due without being considered a greedy selfish asshole.

How is that not greedy and selfish?

...Because you have an agreement with someone that you were a 50/50 co-founder, and that agreement is on paper? Sorry, are you privy to some kind of proof that invalidates Guillory's central evidentiary claim -- in the same way that Zuckerburg and Facebook were able to show that Paul Ceglia fabricated a contract -- or are you just arguing from circular reasoning that Guillory is a greedy asshole and thus his claims that he was unjustly forced out must, QED, be false?

I think the claim is that demanding what is rightfully yours is greedy and selfish. I don't know whether I agree in this case (probably not), but there have been cases in my life where I do agree.

That is correct.

It's that "rightfully yours" bit that really bothers me. Where does that come from and why is it so obviously rightfully yours? It takes some gumption to assume you're in the right. This land is rightfully mine because I bought it from someone else who genocided a people, but okay great, it's rightfully mine, I feel super great about it.

Legal documents are part of a negotiation, not a casual conversation. If one side says they owe you nothing, you come in saying they owe you everything. You meet in the middle.

Same as with patents and everything else.

The one's filing them and demanding what's rightfully theirs are selfish, the one's not filing patents are less selfish.

Assuming Jeremy's story is true, then by the time he exercised that strategy he'd already by forced out by his co-founder and was no longer a "teammate".

I don't think it's fair to judge the ethics of a person by how nicely they respond to being screwed over.

if anything, i would say this make it a +1 to start a company with hodoof, atleast he has some sense of contractual/legal requirements imo... its not about being a dick, you and all parties should know what you getting into/not getting into make sure you have written contracts/agreements in place incase something changes

The company left a liability floating around, which was a disgruntled co founder. Like a liability on your balance sheet.

And if you're the disgruntled co founder, this is your most opportune moment to extract maximum equity value for yourself.

What I don't understand is, if a company did this to another company, people are all like 'yeah, that's how the market works', but when a person does it to a person, they're all like 'you're heartless and not playing nice'. Why the hypocrisy?

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