Company 1: The company went bankrupt, founder renamed the company, started a new company with the same name as the original, transferred some assets for pennies on the dollar. It later went public, but collapsed in the dot-com crash.
Company 2: Company raised $50 million during the dot-com boom. After 5 or so years, it still did not have much revenue to speak of. After several down rounds, it was eventually was sold to a major corporation for pennies on the dollar. All common stock was worthless.
Company 3: Still working on it. There have been several down rounds. All employees got their options re-issued at the lower price after a key employee threatened to walk...
> Company 1: The company went bankrupt, founder renamed the company, started a new company with the same name as the original, transferred some assets for pennies on the dollar. It later went public, but collapsed in the dot-com crash.
Is that legal? It looks like the CEO of the company willingly harmed the company's interest to enrich himself, which is basically fraud.
My best one to date: In early 2002 we got an offer of a well-funded start-up to take over our company. We had the technology, they had the sales, the marketing and the $.
The CEO met me in an office in SV so lavish it would not have been out of place as a Ferrari showroom. Halfway during the meeting - we didn't hit it off all that well - he made the momentous announcement that if we did not accept his offer we'd be going on a head-on collision course for a game of chicken and he had just thrown away his steering wheel.
I just laughed, bade my farewells. They failed spectacularly (not a bankruptcy but the service was shut down) several months later after burning through a very large fraction of $30M.
What puzzles me to this date is what he thought he was trying to accomplish by showing me that he was a reckless cowboy with very little sense for business relations but it certainly wasn't going to end in a partnership with him 'at the wheel' (since he'd just thrown that out).
Reminds me a a company I worked at, I can't say it's name, let's just say it rhymes with Dewlett Dackard.
1) Start with a $55 billion dollar company...
2) Hire a new CEO and cronies that are going to make miracles happen with with a very expensive acquisition of another company.
3) 18 months later the miracles have not happened. CEO and cronies are invited to leave with very generous golden parachutes.
4) Start with a $50 billion dollar company...
Started a company with some friends in May 1999. Company was acquired (with stocks) in February 2000. Everything crashed in March. Lost basically all the money during the coming year. Stock is still 99% down from peak. Crazy days.
But that does happen, in way. The most well-known was Zynga - when they were getting ready to go public they did a claw-back on their outstanding options and shares. They screwed over a friend of mine that was one of the early employees.
One great company after another destroyed by financial shenanigans. Avaya & Silver Lake Partners is another that comes to mind, but there have been many.
Happened to me. I didn't sell the company in the end (mtg meltdown, tech acquisition department got dismissed altogether, etc) and the company never recovered from me taking the "rest". Wasted 3 years of my life and $250K of angel money. Guilty as fuck.
Worked for a start up that was in an extremely long period of due diligence with a big company you've heard of. The big company was giving our company money to meet payroll, so they knew our piggy bank was empty.
Big company says thanks but no thanks. We all get laid off by the start up at lunch time. That afternoon our company lets it be known that they'll be filing a law suit asking for damages of a billion dollars (a similar company had recently sold for several hundred million and it was the dotcom boom days - a billion sounded not entirely insane).
Big company has a change of heart late that night and decides to buy us for tens of millions of dollars. People called and told to come in to the office in the morning - the day had been saved!
The next morning everyone was fired by big company and the little startup was shut down. Ooops.
The one that got me, was the German company I was working for was bankrupted by the president of the company as a key sale of the software product fell through. He did it on December 23rd, before any of the directors could intervene (A quirk of german company law).
I found out on the phone on the 28th while back in the UK. Fun times.
So my contribution:
"When it appears the directors bet the company on a single sale and failed."
After reading the two-chair tale o' woe, the comment that they "sold the business in pieces" leads me to think his company collapsed after the dot.com bust.
Sure, their 1999-2000 balance sheet looked spiffy, but that was the peak of the boom. How did the next year go? Did these guys enjoy a profitable exit or endure a liquidation?
Edit: Poking about, it seems they sold the company in 2003. That's quite a time after the 1999-2000 numbers being splashed about in his feel-good writing. I'll bet the numbers in those later years would shine a bit more light on the business's true condition.
Could you provide a little context to your comment?
I'm not well read on this (eg, what company he lost, how he claims he lost it, etc) -- you seem to be responding in the context of a story, but not a story I know about.
Company 1: The company went bankrupt, founder renamed the company, started a new company with the same name as the original, transferred some assets for pennies on the dollar. It later went public, but collapsed in the dot-com crash.
Company 2: Company raised $50 million during the dot-com boom. After 5 or so years, it still did not have much revenue to speak of. After several down rounds, it was eventually was sold to a major corporation for pennies on the dollar. All common stock was worthless.
Company 3: Still working on it. There have been several down rounds. All employees got their options re-issued at the lower price after a key employee threatened to walk...
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