Founder disputes arise when the founders fail to plan for conflict. At the startup stage, many founders are focused on growing the business at the expense of legal formalities. They do not consider how founders will resolve problems amongst themselves if they arise. This approach can come back to haunt founders later on and they may need to seek out a founder dispute attorney to resolve conflict.
For instance, Frank Brown alleged that Snapchat founders stole his idea and cut him out of the company after a falling out in 2011. Payment processing giant Square faced a lawsuit alleging that it cut out the inventor of its portable credit card reader. The Winklevoss twins sued Facebook alleging that founder Mark Zuckerberg cut them out of the company for his own personal gain.
Clearly, large-scale founders’ disputes are common. Founders avoid these conflicts by clearly documenting each founder’s right and responsibilities. For instance, legal documents can prevent conflicts by specifying a dispute resolution procedure. They can also create a methodology for valuing equity. Equity ownership always should be reduced to writing with the help of an attorney.
But what if it is too late? What if a co-founder is trying to take your fair share of the company you built together? Unfortunately, sometimes it is too late
Consult with a Palo Alto Founder Dispute Attorney
If you believe you are being deprived of your share of your company, you should contact an experienced Silicon Valley founder dispute attorney as soon as possible. You should not sign any documents without legal representation. You should not agree to any changes in ownership, operations, or corporate structure without consulting counsel. The longer you wait, the more challenging it may be to recover your interest in the company (or its fair monetary value).
A Silicon Valley founder dispute attorney should help you understand your goals and options. For instance, do you want equity in the company? Do you want to be paid out for the value of your equity in the company? Do you want to force the company to abide by a prior agreement, or do you want to reach a new agreement in light of changed circumstances?
Depending on the case, you may have all of these options.
Similarly, a founder dispute attorney should help you understand whether litigation is preferable to mediation or informal, private resolution. In some cases, you may need to aggressively litigate a case to win the shares you were promised.
In other cases, a collaborative approach towards resolution may be best. This approach may be best where there is an ongoing business relationship. Similarly, informal resolution often is best where publicity will hurt the company’s value or where the cost of litigation will destroy the company and your work in creating it.
Contact Us for a Free Consultation
King & Siegel can help founders win back their ownership interest, back wages, and other compensation. Our attorneys have successfully represented parties in founders’ disputes concerning companies of all sizes. Our goal is to work cooperatively with you to reach a resolution that maximizes the value of your share of the company. We can help you determine whether litigation is advisable. If necessary, we will fight your case through to the end.