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Fiduciary duties are murky, and what exactly would Y Combinator sue for? They'd spend 20x more in legal fees than they invested, and after they won, what would
by mattmaroon 18y ago
Fiduciary duties are murky, and what exactly would Y Combinator sue for? They'd spend 20x more in legal fees than they invested, and after they won, what would they get? None of their $15-20k back (would be gone in legal fees from the startup they sued, if it weren't already wasted) and control of a company that was comprised of 2 or 3 founders who are now gone for obvious reasons. In the end they'd end up spending a couple hundred grand on a mediocre domain name. Doesn't it seem far better to just have that provision?
I have no doubt they'll exercise that provision if they have to. Having that provision ensures they won't. It's like mutually assured destruction, in that having a large nuclear arsenal prevents both sides from ever using it.