Comment by robocat

4 hours ago

Just looking at shares is over simplistic.

You can't know what other conditions Mullenweg signed in contracts such as shareholders agreements etc.

Typically if you take VC money, the VCs will require the ability to sack the founder and take control, perhaps if particular targets are not met.

I've seen it: an ambitious owner agreed to stretch goals, and the VCs took took over the company from the founder after they had predictably failed to meet the goals.

3 comments

robocat

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moralestapia  4 hours ago

Back to reality. Read TFA again.

  • FreakLegion  2 hours ago

    robocat was answering a general question about the relationship between ownership and control. And they're right that representing 84% of the voting shares doesn't mean anything. It's standard for major investors to have their board seats guaranteed, plus veto rights over things like creating new stock and selling the company. (It's not standard to have "the ability to sack the founder and take control", though.)

    Founders are almost always outnumbered on the board by Series B, but like I speculated in https://news.ycombinator.com/item?id=49638676, Automattic is unusual here, and Mullenweg may control it. There's still a decent chance that True Ventures left in protest rather than being booted, though, and has the right to a seat[1]. It's just, what's the point if Mullenweg has them beat 4-1?

    1. Edit: The article confirms that Toni Schneider resigned, but not whether True Ventures (his firm) has the right to a seat.