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The non-tech founder is likely CEO (as they started in, and likely got the investor on-board), so they can likely fire the TCF without a vote. The board, likely
by nickff 6y ago
The non-tech founder is likely CEO (as they started in, and likely got the investor on-board), so they can likely fire the TCF without a vote. The board, likely made up of NTF, TCF, and investor could then fire the NTF.
In any case, this is not going to end nicely, and I would recommend walking away with whatever equity can be had without setting the counter-parties against TCF. If NTF and investor get really mad, they can easily dilute or destroy TCF's equity, so I'd try to avoid that.
- theptip 6y agoWouldn’t firing the TCF (or any key staffing decision) require a board vote at this stage? Not to mention potentially being a breach of the NTF’s duty of loyalty to the shareholders if they don’t have a good business reason for firing them? In other words the NTF would need to have the investor on board to make that move. IANAL so interested to know how folks with more experience have seen this fact pattern play out.
- irjustin 6y agoThe grandparent comment stated this. The TCF needs to make a case directly to the investor to show their worth and tell their side of the story. It's not explicit this was done, so it's assumed it wasn't. If the TCF hasn't spoken to the investor directly, it's relatively easy to assume the investor will vote in the NTF's direction. Lots of assumptions, but we don't have that much to go on.
- gkoberger 6y agoYou don't give up a board seat for $100k. At least, you definitely shouldn't.
- icedchai 6y agoYou do if you have no other funding.