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I have seen, many times, a company sold off for the exact amount required to pay back the VC investments of the employers of 3/5's of the board.

(This is probably a violation of their fiduciary duty to represent the shareholders, but who is going to sue?)



The majority of shareholders (usually by a lot) in these situations are well-represented by the directors.


I'm sure. Minority shareholder is not exactly a safe place to be.


Paul Graham says he's unaware of many instances where company owners acted to screw small shareholders, and I believe he believes that, but I've seen multiple instances of exactly that†, and because my exposure to startup management is so much smaller than his, and because I don't believe the instances I'm aware of are correlated to each other, I think he's simply wrong about this.

(most of those incidents started with the company encouraging departing employees to purchase their shares)




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