4 ms·

Unfortunately this is the rule more than the exception. I've been at a startup that handed out split stock options like candy while the CEO was planning on usi

Unfortunately this is the rule more than the exception. I've been at a startup that handed out split stock options like candy while the CEO was planning on using his majority control to transfer all IP to a separate entity. I've been at a startup where the executive team buried a clause in the equity agreement that would allow them to forcibly buy back all shares, where the sum valuation of the company was how much money was deposited into a single, explicitly defined bank account. I've seen a non-compete agreement that stated the employee was not only barred from working for competitors for five years, but working in the entire industry altogether. It's amazing the depths of greed you can find when you read the fine print.

Brockenstein 9y ago
>I've seen a non-compete agreement that stated the employee was not only barred from working for competitors for five years, but working in the entire industry altogether. Too bad that's probably not enforceable. But sure it sounds serious when you don't know no better.
- fortythirteen 9y ago
  It was definitely not enforceable, but it was a great indicator of intent. When I pointed out the paragraph to the President, who wrote the agreement, he said, "Oh, we didn't mean to do that. I don't know why that's in there." He was a lawyer. When I pointed out the bank account valuation to the CEO of that startup, he said, "that's not what that says." I informed him that I had run the agreement through two lawyer friends who had confirmed my interpretation.