Comment by vessenes | Hacker News Reader

Comment by vessenes | Hacker News Reader

Okay, on the one hand, this guy will surely be seeing some money, unless it's a forged signature, in which case, he will surely be going to jail.

On the other hand, it is extremely unlikely he will get anything near the order of magnitude of what he's asking for, unless the judge well and truly hates, and I mean hates Zuckerberg and facebook. And the appeals judge, and so on, up the chain.

One reason for this is that the judge is going to be weighing on the one hand this guy's thousand dollar investment, and on the other hand, everybody else's millions of dollars of investment, and asking if harming the millions of dollars of investment is proper on behalf of the guy who put in $1k.

If Zuckerberg is determined to have signed this all away, then the incorporation and all the shareholder agreements, and statements, etc. are void and fraudulent. This impacts not just Zuckerberg, but the other parties he is in business with.

It is nearly inconceivable that a judge would trash the entire corporate structure of Facebook based on this suit. Now, that said, he may sit Z down and say "I'm dumping this problem on your lap, fix it, buddy" by leaving the door open for personal fraud claims and damages to the corporation.

Regardless, in the end a judge is going to be asked if a $1,000 passive investment really should be worth billions of dollars in 6 years. The answer to that question in our country is 'no.'

Also, no way in a cold and frozen hell will DST and MS allow this guy to sit on the board and vote shares. The legal forces arrayed against him are going to be seriously, seriously formidable.

Look for a multimillion dollar settlement. Less than $100mm.

"Regardless, in the end a judge is going to be asked if a $1,000 passive investment really should be worth billions of dollars in 6 years. The answer to that question in our country is 'no.'"

I would hope that in this country, if the investment is backed by the proper legal documents, that the answer would be yes. that whole rule of law thing.

Otherwise, are you saying that if one makes an angel investment of $1K for 10% of a company, that a judge should back other larger deeper-pocketed investors against the angel primarily because the judge would ask "if harming the millions of dollars of investment is proper on behalf of the guy who put in $1k."?

Depending on the incorporation structure that Facebook has, and the stated shareholder disclosures and shareholder agreements signed, this could cause serious difficulty for other investors, and possibly employees of Facebook. Those are real damages, and judges can and will consider them along with the $1k.

In general, American judges have tended to care about this sort of thing -- they are very corporation friendly, especially to reasonably good corporate citizens.

This judgment if done quickly and at the rate asked for is largfer than most tobacco company rulings; and they have knowingly been addicting and killing hundreds of thousands of children around the country! (And have in some cases taken many, many years to wind through the courts.)

In short, if you put in $1k into a startup, and then those guys abandon it, go start a new company with your technology and raise a million dollars, you damn well better be in touch with those founders and investors early if you want to protect your investment.

Think about that for a second: you're a passive investor, hence don't add value to the company outside your money. You put in enough money for one month's rent in Harvard Square. Now, you get outside investors who have put in, say a million dollars. No matter what your agreement with the founders, who invented all this stuff, what do you think the million dollar funding group will offer you when you start rattling their cage around the time of closing the round?

The point is, if he has a real claim, and if he had pursued it as he should have, he still would, right now, own much less than Zuck does if he'd had any sort of quality angel or Series A investors. A guy that takes 50% for $1,000 is NOT an angel. He's either total smallfry or a predator or both; he wouldn't be welcome around the table with legit investors, and he almost certainly would have been bought out for either a small amount of nonvoting stock, or cash, like say $50k.

This would be different if he and Zuck had sat side by side for a year, working on features and split equity based on that, very different, but that's not the situation, no matter how much of a tool Zuckerberg was at that point in his life.

> One reason for this is that the judge is going to be weighing on the one hand this guy's thousand dollar investment, and on the other hand, everybody else's millions of dollars of investment, and asking if harming the millions of dollars of investment is proper on behalf of the guy who put in $1k.

Yeah, rules only apply to the little guys. Contracts should only benefit the big, rich organizations.

Well, in this case, it's more a matter of damages need to be weighed for fairness.

Update: given Zuck's other pending lawsuit, I predict he will be forced to pay personally; no corporate cash for this one.

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