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> And it is the right thing to do if the company has no other prospects or the team is falling apart. Why do you say that? If for moral/altruistic reasons, tha

> And it is the right thing to do if the company has no other prospects or the team is falling apart. Why do you say that? If for moral/altruistic reasons, that doesn't make sense to me - if you have $x million, do you really think the best place to donate it would be to VCs? I don't know anyone who donates to VCs, so I assume the answer is no. (sorry if I come off as harsh, I don't mean to - I just don't know how else to put it)

lsc 11y ago
you don't have $x million. The company you founded, and no longer wholly own has $x million. It's a rather different thing. I mean, unless you are talking about the money for the personal shares the founders sold, the money, as it was said, that they "took off the table" - if that's the case, then I'm completely with you (but I didn't see any indication that they were giving that money back.)
- adamzerner 11y ago
  I was under the impression that someone had decided to give the money back to the investors. That they had a choice, presumably, to do what they want with it. Is that not true? To what extent were they restricted?
  - lsc 11y ago
    that depends on who controls the company, something that usually has to do with ownership percentages, something that wasn't revealed in the article. The thing is, though, even when you control the majority of the company you do have some legal and ethical obligations to the minority shareholders.
    - adamzerner 11y ago
      I see. Well, my point applies to any situation where someone does have the freedom to do what they want with (a large chunk of) money, and chooses to give that money to a VC, rather than, say donating it to an effective charity. Am I the only one who sees something wrong with that?
      - lsc 11y ago
        that seems like an astonishingly unlikely situation.
        adamzerner 11y ago
        Maybe. It's just that I hear of stories that talk about founders giving money back to the investors as if it were admirable. Admirable implies that a decision was made. But maybe I'm just misinterpreting.
        lsc 11y ago
        removed regrettable bit - but he or she is right about the options; ethically and legally, they could have continued to try to make it work, or they could shut down the company, sell the assets and distribute the proceeds to the creditors and then the owners of the company (the investors) Really, one could ethically do either one of those things; it's just that depending on the situation and your perspective, well, probably one or the other is the better choice. Now you seem to be arguing that the choice between continuing to run a company or not is not one that has an 'admirable' option. And maybe from you point of view, it doesn't really matter. There's a stadium down the way from my house. when the football player makes a home run or whatever, well, personally, I don't see how that matters; I don't care, and I'm mildly pissed that I'm going to have to pay for the bonds to build the eyesore. But even so? I don't go to football forms and tell people that the large man getting the ball in the hole or whatever isn't an admirable achievement. It's the game those people want to play, and that's fine. I personally find business really interesting, really in a similar way to the football fan. Most of this stuff doesn't really matter. Some of it does, but even that stuff doesn't matter as much as people say it does. To me? the decision to give the money back to the founders, rather than shitting the money away when you know you have been beaten, is admirable because investors seem to select for overconfidence; quitting before you've spent every cent implies that you were able to project that overconfidence to the investors, but that you were able to remain a rational person. I mean, it's not world peace, sure, but it implies some attributes which within the context of the business game are pretty important.

lsc 11y ago

you don't have $x million. The company you founded, and no longer wholly own has $x million. It's a rather different thing. I mean, unless you are talking about the money for the personal shares the founders sold, the money, as it was said, that they "took off the table" - if that's the case, then I'm completely with you (but I didn't see any indication that they were giving that money back.)

adamzerner 11y ago
I was under the impression that someone had decided to give the money back to the investors. That they had a choice, presumably, to do what they want with it. Is that not true? To what extent were they restricted?
- lsc 11y ago
  that depends on who controls the company, something that usually has to do with ownership percentages, something that wasn't revealed in the article. The thing is, though, even when you control the majority of the company you do have some legal and ethical obligations to the minority shareholders.
  - adamzerner 11y ago
    I see. Well, my point applies to any situation where someone does have the freedom to do what they want with (a large chunk of) money, and chooses to give that money to a VC, rather than, say donating it to an effective charity. Am I the only one who sees something wrong with that?
    - lsc 11y ago
      that seems like an astonishingly unlikely situation.
      - adamzerner 11y ago
        Maybe. It's just that I hear of stories that talk about founders giving money back to the investors as if it were admirable. Admirable implies that a decision was made. But maybe I'm just misinterpreting.
        lsc 11y ago
        removed regrettable bit - but he or she is right about the options; ethically and legally, they could have continued to try to make it work, or they could shut down the company, sell the assets and distribute the proceeds to the creditors and then the owners of the company (the investors) Really, one could ethically do either one of those things; it's just that depending on the situation and your perspective, well, probably one or the other is the better choice. Now you seem to be arguing that the choice between continuing to run a company or not is not one that has an 'admirable' option. And maybe from you point of view, it doesn't really matter. There's a stadium down the way from my house. when the football player makes a home run or whatever, well, personally, I don't see how that matters; I don't care, and I'm mildly pissed that I'm going to have to pay for the bonds to build the eyesore. But even so? I don't go to football forms and tell people that the large man getting the ball in the hole or whatever isn't an admirable achievement. It's the game those people want to play, and that's fine. I personally find business really interesting, really in a similar way to the football fan. Most of this stuff doesn't really matter. Some of it does, but even that stuff doesn't matter as much as people say it does. To me? the decision to give the money back to the founders, rather than shitting the money away when you know you have been beaten, is admirable because investors seem to select for overconfidence; quitting before you've spent every cent implies that you were able to project that overconfidence to the investors, but that you were able to remain a rational person. I mean, it's not world peace, sure, but it implies some attributes which within the context of the business game are pretty important.