Well, that was an interesting anecdote. But usually VC-funded companies have a board majority of said VC's, so they can overrule the founders anytime they want

Well, that was an interesting anecdote. But usually VC-funded companies have a board majority of said VC's, so they can overrule the founders anytime they want to. Most commonly that's used to fire the founders and appoint a pet CEO (sorry, professional manager) who happened to go to school with one of the VC's. So taking a story to them about "giving away our source code" would end up with the same result in most cases.