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I'm wondering why the founders and any other employees can't just be hired away from "their" startup, with a large signing bonus, and no change to the equity structure of their prior company (but, effectively no employees)? Non-competes might prevent this, but I was under the impression that they're not terribly enforceable in California.

Any lawyers out there to clarify?

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Not giving legal advice but here are my two-cents: 1) Possible tax savings: Signing bonuses are taxed as income. If you held your stock long enough, you may qualify for long-term capital gains tax treatment. 2) Silicon Valley is a repeat player business. You don't want to screw over your investors if you want to raise more funds or do anything else here where folks might ask around about you. 3) Non-competes are generally unenforceable in CA except in certain situations, including the acquisition of a company.

> Non-competes might prevent this, but I was under the impression that they're not terribly enforceable in California.

It is enforceable (in California) when the employee holds "significant" equity and the company the employee is leaving for is a competitor. If you're not developing a social networking site, Facebook should be able to hire you AFAIK.

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