13 ms·

Knowing very little about the case, it's hard to take a side without legal due process. Statistically, from other similar cases, there's a good chance this Jere

Knowing very little about the case, it's hard to take a side without legal due process. Statistically, from other similar cases, there's a good chance this Jeremy guy is probably full of shit. But this rubbed me the wrong way: > Still, it’s important to the way Silicon Valley works that such behavior not be tolerated. You're not above the law, nor should you have more say than any other resident in Silicon Valley (but by all means, vote in elections and write your congressman). If someone makes a legal claim, that's up for the courts to decide. They have every right to make such a legal claim. And investors have the right to fire back publicly, sure. But this attitude is now starting to make me think that there's more to this: > Kyle made an extremely generous offer to settle this claim by offering to give Jeremy a lot of his own money. Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. Edit: from another top-level comment, >To that point, the fourth cause of action is regarding "Trade Secrets" in the possession of the Defendant and states that "Plaintiffs have reason to be concerned that Defendant may attempt to use such trade secrets in his further endeavors" Which does prompt a question of how a person who never had any involvement in the company and its technology came to be in possession of its trade secrets. And now I already have some reasonable doubt that makes me want to think a bit harder. To re-iterate, I still think this Jeremy guy is most likely full of crap. But I am not a big fan of the attitude and public shaming of YC here. What this tells me is as follows: if I have anything to do with a successful YC company in the future and I get involved in a legal claim that looks unfavorable, some popular top investor could write a blog post shaming me and ruining my reputation for other startups. Not professional if you ask me.

birken 11y ago
Agreed. I also was rubbed the wrong way by: > parted ways ... and well before the company had achieved much of anything. There are many shareholders of Thumbtack who left voluntary (or not) "well before the company had achieved much of anything," because companies take a long time to achieve big things. That doesn't mean they didn't have critical early contributions or that they aren't entitled to their equity. I'm not saying that means this guy is entitled to anything, clearly the courts will figure that out, but I think writing off early contributions in a nascent company as having no value is also wrong.
- etjossem 11y ago
  That's right. Late employees build on the shoulders of early employees. The idea that founding team members are somehow inherently less entitled to their equity doesn't make sense. Indeed, they often forgo salaries in exchange for it. Edit: getting some downvotes. I'd like to hear why you think I'm wrong.
jboydyhacker 11y ago
>> Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. Ok this is not remotely true. Baseless claims in court can go on for years - then they can be appealed and appealed again. It's often offensive to settle but that's why it's called "settling" since you don't have an optimal outcome. Are you just trolling?
- DigitalJack 11y ago
  That is not what settle means. Settle means "to reach an agreement." You are probably thinking of "compromise."
Someone1234 11y ago
> Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. That isn't true at all. If you have a larger merger hanging in the balance or if the lawsuit would be expensive and long, it can make sense to settle even if you're "right." A lot of businesses settle for things which they may be innocent of because it makes financial sense (and there are a lot of smart lawyers around filing lawsuits every day knowing they're ultimately baseless but still cheaper to settle). Mergers are a prime time for frivolous lawsuits because people know that the business will be under undue pressure to settle it so the merger can go through. PS - This post isn't about this specific case, I don't know if it is frivolous or justified, I am talking more broadly.
- nxzero 11y ago
  >> "That isn't true at all." In fact, it's false. The majority of cases, both criminal and civil, are settled in the US before going to trial.
  - akiselev 11y ago
    How many cases are thrown out versus those that are filed? Is a baseless case immediately frivolous and dismissed or does it take tens or hundreds of hours of billable time to show a judge that it is baseless?
    - tptacek 11y ago
      The latter! And, even apart from the billable hours, you can lose months just to court delays. More importantly: these aren't especially easy cases to dismiss. To first approximation: getting a case dismissed requires an argument that regardless of any evidence that might be admitted at trial, the opponent can't possibly prevail simply on legal grounds. Here we have the case of someone who claims to have had a partnership agreement that predates Cruise's incorporation. That agreement may have been oral, or it may have been memorialized in some casual way. It's also important to observe that it's Cruise suing here, not the person claiming an equity stake. That's because the person making that claim can wait until the least convenient possible time to file suit. The leverage they have in this case is probably just torpedoing the deal, not relief in court.
blazespin 11y ago
I think part of the problem is that Sam isn't able to talk about the tactics that Jeremy might be using, such as "pay me or I screw up the merger." I think Sam probably should have realized that he couldn't explain why he is so upset and therefore should have just not said anything. I do agree on one thing though, calling the guy out by name like absolutely reeks. "I'm going to destroy you for attacking one of my investments!!" Please. I think it would have been much better if he never used his name, which of course is now going to show up in Google Searches.
- mborch 11y ago
  It's already public record since it's a law suit.
taytus 11y ago
>Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. This. I also don't understand why he never signed a separation agreement.
sama 11y ago
> Still, it’s important to the way Silicon Valley works that such behavior not be tolerated. All I meant was to express my view there, but you're right, I don't like the way that reads either. I'm going to update it. > Kyle made an extremely generous offer to settle this claim by offering to give Jeremy a lot of his own money. I think that happens in nearly all of these cases, which is part of why I find them so upsetting. People know that you can pressure people under extraordinary circumstances, like an acquisition closing, to give you something. >To re-iterate, I still think this Jeremy guy is most likely full of crap. But I am not a big fan of the attitude and public shaming of YC here. What this tells me is as follows: if I have anything to do with a successful YC company in the future and I get involved in a legal claim that looks unfavorable, some popular top investor could write a blog post shaming me and ruining my reputation for other startups. Not professional if you ask me. We tried every non-public method we knew of first. When it came time for the seal to be lifted, I wanted people to know how hard Kyle tried to settle. My original plan was to write a general post about this problem with no specifics after this settled, which I didn't like but thought was 95% likely to happen.
- zxcvvcxz 11y ago
  The frustration is understandable, it's a shitty situation and I've also had a "useless" "co-founder" try and hold onto equity that didn't vest, after he left and contributed little. > I think that happens in nearly all of these cases, which is part of why I find them so upsetting. People know that you can pressure people under extraordinary circumstances, like an acquisition closing, to give you something. Yeah, this is a topic that deserves its own post for sure. Timing-wise though, if Jeremy has any claim at all, he needs to make it now before facing the acquirer's lawyers, so there's that angle too. I definitely think there's some nuance here, and am not sure what a superior system would look like. > We tried every non-public method we knew of first. When it came time for the seal to be lifted, I wanted people to know how hard Kyle tried to settle. Do you see the logic of my last point though, why people would perhaps not look favourably of your public disclosure of this topic, even if you're right? Moreover, what was going public on the individual supposed to accomplish? Because it could sort of look like someone in power trying to strong-arm someone not. Regardless, I wish the Cruise team and yourself the best, and a speedy departure from this issue. It looks like technology and legal claims are going to continue to interact in increasingly complex ways down the road.
nickysielicki 11y ago
Yeah, what the hell? When there are large sums of money at play, who among us wouldn't work in their best interest? If you have a lawyer telling you that there's a case to be made, you would be a complete and utter moron to not take that route. Do you guys think any angel in such a situation would give it a second thought? Silicon Valley Exceptionalism is the product that YC sells, and boy do they sell it well. They want you to believe that SF is a magical place where you're expected to reject the opinion of a lawyer saying you have a claim to millions of dollars-- because Silicon Valley is a totally chill place, bro. No assholes in the bay! When large sums of money get involved, lawyers get involved, and your actions are masked by your lawyer. I am not going to judge this guy at all. I feel like the author is trying to make the case that this guy is an asshole, and implicitly, because we all know YC doesn't like to help assholes-- and because that's an agreeable ideal, we're supposed this guy as the enemy. But maybe it's the case that he's really a good guy that realizes that he has the opportunity to convince a court to award him a life-changing amount of money. I really hope the motivation between this post is not to give him an ultimatum. I really hope the reasoning is not, "I have the ability to get a post on the front page of HN, and I can use that as leverage to make this guy's lawsuit more of a gamble-- I can drag his name through mud and stick it on the top of HN, such that he will have more difficulty getting a job in SV after this lawsuit. Unless, of course, he drops the case." Because if that's the motivation, then I think it's pretty clear who is being an asshole.
- marincounty 11y ago
  I don't know anything about the dispute. Sam Altman sounds genuinely angry. That said, I thought YC would alwready have in place strict agreements, especially mandatory arbitration clauses, when they dole out the money? As to settling, I think about this farmer who was sued by Monsanto for stealing intellectual property. He, and his wife had a dream of a small organic farm somewhere in the south. They were situated next to a big farm that used Monsanto seeds. Pollen from the adjacent property blew onto his property/crop. Monsanto took some of his corn crop and looked for their patented genes. They found some. (I'm unclear of the science behind their claim. I didn't think just pollen from the Monsanto field could take over an entire separate crop of plants?) Anyways, the young couple wanted to vociferously fight the suit. Within weeks they were pretty much beaten up by Monsanto lawyers, detectives, and henchmen (paid witnesses). His neighbor's reluctant advice was unless you want to spend a half million defending your innocence; just settle the Monsanto suit. They have enough money to keep you in court for years. The neighbor didn't even want to be seen with the guy--Monsanto has detectives in the area, and supposedly keep detailed logs on these farmers. If anyone is interested it's all in a documentary, called Eating Alabama.
tptacek 11y ago
Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. This is categorically false. Equity disputes kill deals. Even if you're right, it can take upwards of a year to resolve a claim, especially without documentation. Offering a settlement is usually the rational response.
thejaredhooper 11y ago
>some popular top investor could write a blog post shaming me and ruining my reputation for other startups. Not professional if you ask me I think it would have been more professional to state, in neutrality, the status of the legal proceedings - rather than implicitly accuse the man of being greedy by refusing a "generous" settlement.
spyckie2 11y ago
I think it is fine for Sam to post something like this. It's not illegal and people will think twice before opportunistically suing companies that are backed by Sam. Anyone with power that flexes it will be accused of abusing it. In this instance, I don't think it is abuse (although I can also argue that any use of power is an abuse of it). I appreciate that Sam is willing to flex his power to protect companies he is vested in. It makes me clear on his values. I also don't think the appropriate response to legal action should be to "leave it up for the courts to decide". Legal action is meant to right injustices, but in the real world people use legal action for all sorts of other reasons, and you're handicapping yourself and living in your ideals if you think people don't use legal action for their own benefit. You're defining a marching formation to go to war and you'll get trounced by people who don't constrain themselves in that way. Legal action has results well beyond the courtroom. In this case, it can stop a merger. It causes libel. It defames reputation. Even if you win the case, you lose. If you settle out of court, you lose. And there's almost no recourse for unquantifiable damages or loss of reputation caused by the claims. I'll admit taking legal action is one of the few ways injustice can be righted and that is a value that should be upheld. But, by nature, a system that makes sure injustice is dealt with fairly also is really easy to abuse by pretty much everyone else.
nailer 11y ago
> nor should you have more say than any other resident in Silicon Valley I'm fairly sure Sam meant in terms of the startup ecosystem rather than the real estate. I also bet you're aware of that and decided to write that anyway.

birken 11y ago

Agreed. I also was rubbed the wrong way by: > parted ways ... and well before the company had achieved much of anything. There are many shareholders of Thumbtack who left voluntary (or not) "well before the company had achieved much of anything," because companies take a long time to achieve big things. That doesn't mean they didn't have critical early contributions or that they aren't entitled to their equity. I'm not saying that means this guy is entitled to anything, clearly the courts will figure that out, but I think writing off early contributions in a nascent company as having no value is also wrong.

etjossem 11y ago
That's right. Late employees build on the shoulders of early employees. The idea that founding team members are somehow inherently less entitled to their equity doesn't make sense. Indeed, they often forgo salaries in exchange for it. Edit: getting some downvotes. I'd like to hear why you think I'm wrong.

jboydyhacker 11y ago

>> Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. Ok this is not remotely true. Baseless claims in court can go on for years - then they can be appealed and appealed again. It's often offensive to settle but that's why it's called "settling" since you don't have an optimal outcome. Are you just trolling?

DigitalJack 11y ago
That is not what settle means. Settle means "to reach an agreement." You are probably thinking of "compromise."

Someone1234 11y ago

> Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. That isn't true at all. If you have a larger merger hanging in the balance or if the lawsuit would be expensive and long, it can make sense to settle even if you're "right." A lot of businesses settle for things which they may be innocent of because it makes financial sense (and there are a lot of smart lawyers around filing lawsuits every day knowing they're ultimately baseless but still cheaper to settle). Mergers are a prime time for frivolous lawsuits because people know that the business will be under undue pressure to settle it so the merger can go through. PS - This post isn't about this specific case, I don't know if it is frivolous or justified, I am talking more broadly.

nxzero 11y ago
>> "That isn't true at all." In fact, it's false. The majority of cases, both criminal and civil, are settled in the US before going to trial.
- akiselev 11y ago
  How many cases are thrown out versus those that are filed? Is a baseless case immediately frivolous and dismissed or does it take tens or hundreds of hours of billable time to show a judge that it is baseless?
  - tptacek 11y ago
    The latter! And, even apart from the billable hours, you can lose months just to court delays. More importantly: these aren't especially easy cases to dismiss. To first approximation: getting a case dismissed requires an argument that regardless of any evidence that might be admitted at trial, the opponent can't possibly prevail simply on legal grounds. Here we have the case of someone who claims to have had a partnership agreement that predates Cruise's incorporation. That agreement may have been oral, or it may have been memorialized in some casual way. It's also important to observe that it's Cruise suing here, not the person claiming an equity stake. That's because the person making that claim can wait until the least convenient possible time to file suit. The leverage they have in this case is probably just torpedoing the deal, not relief in court.

blazespin 11y ago

I think part of the problem is that Sam isn't able to talk about the tactics that Jeremy might be using, such as "pay me or I screw up the merger." I think Sam probably should have realized that he couldn't explain why he is so upset and therefore should have just not said anything. I do agree on one thing though, calling the guy out by name like absolutely reeks. "I'm going to destroy you for attacking one of my investments!!" Please. I think it would have been much better if he never used his name, which of course is now going to show up in Google Searches.

mborch 11y ago
It's already public record since it's a law suit.

taytus 11y ago

>Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. This. I also don't understand why he never signed a separation agreement.

sama 11y ago

> Still, it’s important to the way Silicon Valley works that such behavior not be tolerated. All I meant was to express my view there, but you're right, I don't like the way that reads either. I'm going to update it. > Kyle made an extremely generous offer to settle this claim by offering to give Jeremy a lot of his own money. I think that happens in nearly all of these cases, which is part of why I find them so upsetting. People know that you can pressure people under extraordinary circumstances, like an acquisition closing, to give you something. >To re-iterate, I still think this Jeremy guy is most likely full of crap. But I am not a big fan of the attitude and public shaming of YC here. What this tells me is as follows: if I have anything to do with a successful YC company in the future and I get involved in a legal claim that looks unfavorable, some popular top investor could write a blog post shaming me and ruining my reputation for other startups. Not professional if you ask me. We tried every non-public method we knew of first. When it came time for the seal to be lifted, I wanted people to know how hard Kyle tried to settle. My original plan was to write a general post about this problem with no specifics after this settled, which I didn't like but thought was 95% likely to happen.

zxcvvcxz 11y ago
The frustration is understandable, it's a shitty situation and I've also had a "useless" "co-founder" try and hold onto equity that didn't vest, after he left and contributed little. > I think that happens in nearly all of these cases, which is part of why I find them so upsetting. People know that you can pressure people under extraordinary circumstances, like an acquisition closing, to give you something. Yeah, this is a topic that deserves its own post for sure. Timing-wise though, if Jeremy has any claim at all, he needs to make it now before facing the acquirer's lawyers, so there's that angle too. I definitely think there's some nuance here, and am not sure what a superior system would look like. > We tried every non-public method we knew of first. When it came time for the seal to be lifted, I wanted people to know how hard Kyle tried to settle. Do you see the logic of my last point though, why people would perhaps not look favourably of your public disclosure of this topic, even if you're right? Moreover, what was going public on the individual supposed to accomplish? Because it could sort of look like someone in power trying to strong-arm someone not. Regardless, I wish the Cruise team and yourself the best, and a speedy departure from this issue. It looks like technology and legal claims are going to continue to interact in increasingly complex ways down the road.

nickysielicki 11y ago

Yeah, what the hell? When there are large sums of money at play, who among us wouldn't work in their best interest? If you have a lawyer telling you that there's a case to be made, you would be a complete and utter moron to not take that route. Do you guys think any angel in such a situation would give it a second thought? Silicon Valley Exceptionalism is the product that YC sells, and boy do they sell it well. They want you to believe that SF is a magical place where you're expected to reject the opinion of a lawyer saying you have a claim to millions of dollars-- because Silicon Valley is a totally chill place, bro. No assholes in the bay! When large sums of money get involved, lawyers get involved, and your actions are masked by your lawyer. I am not going to judge this guy at all. I feel like the author is trying to make the case that this guy is an asshole, and implicitly, because we all know YC doesn't like to help assholes-- and because that's an agreeable ideal, we're supposed this guy as the enemy. But maybe it's the case that he's really a good guy that realizes that he has the opportunity to convince a court to award him a life-changing amount of money. I really hope the motivation between this post is not to give him an ultimatum. I really hope the reasoning is not, "I have the ability to get a post on the front page of HN, and I can use that as leverage to make this guy's lawsuit more of a gamble-- I can drag his name through mud and stick it on the top of HN, such that he will have more difficulty getting a job in SV after this lawsuit. Unless, of course, he drops the case." Because if that's the motivation, then I think it's pretty clear who is being an asshole.

marincounty 11y ago
I don't know anything about the dispute. Sam Altman sounds genuinely angry. That said, I thought YC would alwready have in place strict agreements, especially mandatory arbitration clauses, when they dole out the money? As to settling, I think about this farmer who was sued by Monsanto for stealing intellectual property. He, and his wife had a dream of a small organic farm somewhere in the south. They were situated next to a big farm that used Monsanto seeds. Pollen from the adjacent property blew onto his property/crop. Monsanto took some of his corn crop and looked for their patented genes. They found some. (I'm unclear of the science behind their claim. I didn't think just pollen from the Monsanto field could take over an entire separate crop of plants?) Anyways, the young couple wanted to vociferously fight the suit. Within weeks they were pretty much beaten up by Monsanto lawyers, detectives, and henchmen (paid witnesses). His neighbor's reluctant advice was unless you want to spend a half million defending your innocence; just settle the Monsanto suit. They have enough money to keep you in court for years. The neighbor didn't even want to be seen with the guy--Monsanto has detectives in the area, and supposedly keep detailed logs on these farmers. If anyone is interested it's all in a documentary, called Eating Alabama.

tptacek 11y ago

Smart people don't settle if a claim is baseless. Baseless claims get thrown out quickly and easily. This is categorically false. Equity disputes kill deals. Even if you're right, it can take upwards of a year to resolve a claim, especially without documentation. Offering a settlement is usually the rational response.

thejaredhooper 11y ago

>some popular top investor could write a blog post shaming me and ruining my reputation for other startups. Not professional if you ask me I think it would have been more professional to state, in neutrality, the status of the legal proceedings - rather than implicitly accuse the man of being greedy by refusing a "generous" settlement.

spyckie2 11y ago

I think it is fine for Sam to post something like this. It's not illegal and people will think twice before opportunistically suing companies that are backed by Sam. Anyone with power that flexes it will be accused of abusing it. In this instance, I don't think it is abuse (although I can also argue that any use of power is an abuse of it). I appreciate that Sam is willing to flex his power to protect companies he is vested in. It makes me clear on his values. I also don't think the appropriate response to legal action should be to "leave it up for the courts to decide". Legal action is meant to right injustices, but in the real world people use legal action for all sorts of other reasons, and you're handicapping yourself and living in your ideals if you think people don't use legal action for their own benefit. You're defining a marching formation to go to war and you'll get trounced by people who don't constrain themselves in that way. Legal action has results well beyond the courtroom. In this case, it can stop a merger. It causes libel. It defames reputation. Even if you win the case, you lose. If you settle out of court, you lose. And there's almost no recourse for unquantifiable damages or loss of reputation caused by the claims. I'll admit taking legal action is one of the few ways injustice can be righted and that is a value that should be upheld. But, by nature, a system that makes sure injustice is dealt with fairly also is really easy to abuse by pretty much everyone else.

nailer 11y ago

> nor should you have more say than any other resident in Silicon Valley I'm fairly sure Sam meant in terms of the startup ecosystem rather than the real estate. I also bet you're aware of that and decided to write that anyway.