Comment by overfeed
11 hours ago
> Must be a pretty nice sum for them to agree to it
Not necessarily: if the investors don't agree to a reasonable amount, the wanna-be acquirer will simply hire the entire team with generous sign-on bonuses, and the investors will be left with a shell of a company.
In this case, the core product is MIT-licensed, the team can quit on a Friday and pick up exactly where they left off under a new org on Monday.
Not necessarily. There are likely key person clauses in the prior round docs.
It has happened in the recent past (2-4 years ago?); I can't remember both the acquirer and the hollowed-out startup, and searches are returning chaff, but it got to the HN frontpage.
IANAL, but at-will employment cuts both ways- thr best an employer can do on behalf of investors, are golden handcuffs - and people can be bought out of those.
That’s not quite actually true and it is a bit more nuanced than that. For example, while non-competes and non-solicits are unenforceable in CA for employment agreements, they absolutely are enforceable for mergers and acquisitions.
The laws governing employment are a subset of the laws governing M&A.
In M&A's you usually sign non-competes.
The husk of a company would still be bound by whatever contacts were signed by its officers. However, non-compete enforcement against individuals have been declawed in California, where VoidZero is headquartered, and (I assume) where its investors are, and whose courts they've likely agreed to adjudicate disagreements.
This is an extreme measure not usually taken, but it's a nuclear option that sets a ceiling on how much investors may play hardball.
> However, non-compete enforcement against individuals have been declawed in California, where VoidZero is headquartered
Not in M&A.
https://www.freshfields.com/en/our-thinking/blogs/a-fresh-ta...