What else would you want that liquidity for? Paying off the founders lets investors worry less about them wanting to sell before the investors want to sell (the

What else would you want that liquidity for? Paying off the founders lets investors worry less about them wanting to sell before the investors want to sell (the investors don't have 99% of their net worth in the startup like the founders likely do). It would be nuts to try and claw back that money. The founders surely had remaining equity which is now worthless, everyone is taking a hair cut. > In fact, when executives sell a bunch of stock right before public companies announce bad news or go bust it often warrants an insider trading investigation. They didn't just do this, the last round was in July 2014. It was a flash in the pan.