Why do VCs let founders cash out pre-IPO?
AFAIK fiduciary self dealing is illegal in public companies but for whatever reason WeWork's investors evidently didn't seem to care. Why?
AFAIK fiduciary self dealing is illegal in public companies but for whatever reason WeWork's investors evidently didn't seem to care. Why?
Because they aren't as smart as we/they think they are. Like most people, they have zero repeatable ability to spot unicorns or conmen.
if you owe them 50B (val of wework), you own them
If I'm understanding you right, it sounds like VCs choose to not require fiduciary-style obligations of the founders?
e.g. whatever the contract looks like, I'm a bit surprised it wouldn't have a term along the lines of 'by taking this money you promise not to self deal'