3 ms·

In M&A's you usually sign non-competes.

overfeed 4mo ago
The husk of a company would still be bound by whatever contacts were signed by its officers. However, non-compete enforcement against individuals have been declawed in California, where VoidZero is headquartered, and (I assume) where its investors are, and whose courts they've likely agreed to adjudicate disagreements. This is an extreme measure not usually taken, but it's a nuclear option that sets a ceiling on how much investors may play hardball.
- borski 4mo ago
  > However, non-compete enforcement against individuals have been declawed in California, where VoidZero is headquartered Not in M&A. https://www.freshfields.com/en/our-thinking/blogs/a-fresh-take/non-competes-in-california-a-practical-guide-102lqgq https://www.freshfields.com/en/our-thinking/blogs/a-fresh-ta...
  - overfeed 4mo ago
    Thanks - I wasn't aware about the M&A carve-out, which makes sense. It reads to me like clause (c) is the most relevant: (c) all of the ownership interest of any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold... has been carried on, so long as the buyer... carries on a like business therein. and it prohibits competition "on a similar business". The Vite team would be blocked from competing against VoidZero, but Cloudfare isn't a similar business IMO, and they would be free to work on a private "Pronto" fork within Cloudflare (which is unlike the real-life Cloudflare/Vite scenario where they will continue public releases)
    - borski 4mo ago
      Maybe. It would require courts and nuance; cloudflare is in a lot of businesses nowadays. It rarely comes into effect regardless because people rarely spend less than a couple years at the acquirer, but regardless.
      - overfeed 4mo ago
        There's also the issue of participating in a funding round is neither a merger nor an acquisition. VC investors are not covereed

The husk of a company would still be bound by whatever contacts were signed by its officers. However, non-compete enforcement against individuals have been declawed in California, where VoidZero is headquartered, and (I assume) where its investors are, and whose courts they've likely agreed to adjudicate disagreements. This is an extreme measure not usually taken, but it's a nuclear option that sets a ceiling on how much investors may play hardball.

borski 4mo ago
> However, non-compete enforcement against individuals have been declawed in California, where VoidZero is headquartered Not in M&A. https://www.freshfields.com/en/our-thinking/blogs/a-fresh-take/non-competes-in-california-a-practical-guide-102lqgq https://www.freshfields.com/en/our-thinking/blogs/a-fresh-ta...
- overfeed 4mo ago
  Thanks - I wasn't aware about the M&A carve-out, which makes sense. It reads to me like clause (c) is the most relevant: (c) all of the ownership interest of any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold... has been carried on, so long as the buyer... carries on a like business therein. and it prohibits competition "on a similar business". The Vite team would be blocked from competing against VoidZero, but Cloudfare isn't a similar business IMO, and they would be free to work on a private "Pronto" fork within Cloudflare (which is unlike the real-life Cloudflare/Vite scenario where they will continue public releases)
  - borski 4mo ago
    Maybe. It would require courts and nuance; cloudflare is in a lot of businesses nowadays. It rarely comes into effect regardless because people rarely spend less than a couple years at the acquirer, but regardless.
    - overfeed 4mo ago
      There's also the issue of participating in a funding round is neither a merger nor an acquisition. VC investors are not covereed