Getting shares back from my co-founders

Really a class act on the parts of Ariel and Anton. I hope that if I found myself in their position that I would be as gracious.

Forgive my shear ignorance, but why would two original co-founders who are no longer active holding 0.5% each scare off investors and such?

Kudos to the minority shareholders for giving up a legal entitlement graciously...<p>...but why on earth is there a stringent corporate structure and equity doled out <i>years</i> before there is even a concrete idea or tangible business?

I think it was terrible deal. Why give up shares you earned?

This guy should have kept this quiet instead of going for the PR anyone in the future who is looking to invest into this company is going to come across this article.<p>As much as everyone is stating how gracious this is this would actually be a warning sign for me to invest any amount of money into this company.<p>Two previous co-founders willing to throw away a combined 1% of the company for less than an hour of effort. Puts the real valuation of this startup into view when you have two previous co-founders literally throw their equity away.<p>Consider this startup marked to avoid in the future of any round...

The "official" way to do this is through what's called a 409A Valuation, a process designed to assess the fair market value of your common stock (and other classes, eventually).<p>You can do one yourself (note: talk to your CFO first -- you have someone handling that if you've closed a convertible note, right?), or pay a third party (usually a bank) to do it. They're relatively inexpensive.<p>You'll have to do one if you ever want to grant options (or RSUs) to potential employees. How else do you set the options' strike price?

Innovation wins again. Way to disrupt the 'shareholder negotiations' space with a crowd sourced, freemium model.<p>The only issue with scaling, however, is the music licenses as there's value being exchanged. Napster meets reverse Angellist, well played.

I would never have done that, from either side of the table. But it brings up a good question: when is a "pivot" a new company altogether?

Are your dashes masquerading as underscores?

If the early shareholders invested significant time and effort into the business, I don't see why it's 'right' for them to give up their shares. While they are certainly entitled to do so, pressuring them to drop even their 0.5% seems unethical to me.<p>If those early founders actually did not contribute much in those early days, I would revise this opinion. However as it stands, it seems akin to asking an early financial investor to return his equity. If I give you $50,000 and you pivot ten times, I should still own a piece of your company. Same goes for early founders.<p>The early founders had already agreed to diminish their share to 1% combined. Pressuring them to go any lower seems greedy and unnecessary assuming they invested significant time and energy over a long period of time, even if it was for an earlier idea.<p>Unlike most of the comments here, I'm not sure this was a class act. Given that the early founders voluntarily gave up their equity, I suppose the continuing founders deserve some benefit of the doubt.<p>I don't think I would have agreed to give up my last bit of equity as I would feel 0.5% was fair simply for being a part of the early team formation, ideation, and apparently discarded product development work. I would probably be annoyed by the offer and ignore it.

Glad to see they were reasonable about it and +1 for going through with it. Hats off to everyone involved.

I know it's very un-hn and I'm going to get downvoted but..<p>HAHAHAHAHAHAAHAHAHA!!!