> For the next decade, Bloodhound recovered and slowly grew, raising seven more rounds of financing. In April 2011, the company was sold for $82.5 million.
11 years is a long time. How much do they think they deserved?
After reading all of these comments - my thought process goes like this: If the founders output from 11 years ago is worthless, why isn't the investors' money from 11 years ago equally worthless?
If the founders' sweat equity didn't create value, the early VC money didn't either. Should the early VC's lose their investment, or just the founders?
I'm not naive, I understand that these deals are structured this way...I'm just saying that the structure is bullshit (imo).
"For the next decade, Bloodhound recovered and slowly grew, raising seven more rounds of financing." <-- if the insiders participated in follow-on rounds they stayed involved all the way through. Once again, that's what seems to be indicated but it isn't spelled out.
Two years after the founders are gone, the company begins to make money again.
Then 11 years, the company is sold for a lot of money.
And the founders feel they are entitled to a large chunk of that, despite their non-involvement in operation of the company and their diluted ownership (unsurprising, but common with multiple rounds of financing that they were in favor of).
It’s worth noting that many of the founders claims have been dismissed as egregious, lacking in evidence and otherwise.
- Did they uncover some unique IP, or was the exit the work of subsequent management?
- How much did the VCs influence the exit?
- Did the founders trade downside protection for more upside?
It's hard to know the answers.