zlacker

What about the people who got paid equity for the past few years of work and now might see all of their equity intentionally vaporized? They essentially got cheated into working for a much lower compensation than they were promised.

I get that funny money startup equity evaporates all the time, but usually the board doesn’t deliberately send the equity to zero. Paying someone in an asset you’re intentionally going to intentionally devalue seems like fraud in spirit if not in law.

>>esoter+(OP)
There is probably a lawsuit here, I would not disagree, but I don't think the board will have too much trouble arguing that they didn't intentionally send the equity to zero. I certainly haven't seen any of them state that that was their intention here. But the counter argument that theyshould have known that their actions would result in that outcome may be a strong one.

But I think it is probably sufficient to point to the language in the contracts granting illiquid equity instruments that explicitly say that the grantee should not have any expectation of a return.

But I think this is an actual problem with the legal structure of how our industry is financed! But it's not clear to me what a good solution would even be. Without the ability to compensate people with lottery tickets, it would just be even more irrational for anyone to work anywhere besides the big public companies with liquid stock. And that would be a real shame.

>>esoter+(OP)
The board would counter that that equity was for a stake in a non-profit open source research company and the board was simply steering the ship back towards those goals.