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So here's the thing: I actually think some of this is Kyle's fault, even if that doesn't feel "great" to say. We had a similar situation with a third cofounder for a few weeks (who is still one of my closest friends, though admittedly it's been a while since we caught up). Our lawyers recommended having us (and him) sign a document when we incorporated and receive compensation (it was like $25 each) for the IP created prior to incorporation.

That would have resolved this whole issue, if they had thought about it before it really became a problem, no?

For any given shitty situation X, there is an airtight legal remedy had only such remedy been applied Y years ago.

The set of shitty situations is unbounded, and therefore so is the set of hindsight legal techniques to avoid them.

While that's true, that's a strawman.

This was a particular situation that Kyle & co. clearly knew about, and it could very easily have been prevented. That's very different from an unforeseen legal circumstance that occurs solely due to bad luck or an outside bad actor; they knew Jeremy was with them for the first month, and they knew he left.

I have been in similar situations, with competent legal advice, and was not advised to make the described arrangements (token compensation, etc.) I certainly did not think of it on my own. Luckily for me my company failed so I did not have to deal with anything like this.

Perhaps I was given other advice that was unique to my lawyers. That would be nice, because when somebody got caught out because their lawyers did not give similar guidance, I could congratulate myself on having done the obvious.

Oh come on, you're saying you could not have predicted that a person with whom you began work on a company may one day sue you?

Think ahead a few moves. My lawyers did not tell me 'hey you should deal with this situation,' they just told me how best to deal with it after I asked.

Yes, for sure--Kyle should absolutely have done that.

Why was this not discovered in due diligence with YC and VCs? Or did Kyle never mention this former cofounder in their fundraising discussions?

I understand Cruise raised over $17M of capital through two rounds, plus the accelerator. In theory that is three stages of due diligence from well-regarded firms in silicon valley who either missed this deal-breaker or gave the wrong advice.

VCs involved included Spark Capital, SV Angel, Felicis Ventures, Signia Venture Partners, Founder Collective, Quotidian Ventures, AME Cloud Ventures, Initialized Capital, Y Combinator, Homebrew Ventures, Maven Ventures, Zillionize, and Flight VC.

According to sama's post he was named as a cofounder on the company's YC application so clearly they knew about him. As for why they didn't get an agreement to waive or buy out any claim he might have early on, well...

I understand that Y Combinator keeps recordings of YC interviews so that they can go back and analyze their decisions for failed investments or anti-portfolio companies. This would be a very good time for them to go back and review that interview, and I wonder if it will be brought up in court.

I do due diligence for a living (for PE and VC) and you'd be surprised how little diligence is done in VC and when it's done, how much is often missed. Especially in VC when the model is a portfolio approach it's usually not worth the burden.

Right, and I don't mean to 'victim blame.' Mostly, I put this here as a harbinger for other folks who may find themselves in a similar situation in the future.

It doesn't seem like any IP was created by the guy in question.

We don't know that. We know that Kyle says that's true. Did Jeremy create the original logo? Did he come up with a particular idea? I'm sure these will all be things that come out in the case, but I hesitate to take one particular side's 'truth' as the whole truth.

Anyway, I'm just trying to inform folks that this is a possibility, and that they should take care of this sort of stuff early. It doesn't take long, and it isn't expensive.

I did make you a beautiful logo, didn't I ;) Yes, it's been a while.

One of the reasons I signed and took your $25 offer was because I wanted to live in a future where I didn't feel massively entitled to someone else's successes. At some point it makes sense to lock in your friendship with your friend-who-you-decided-to-maybe-cofound-with-but-stayed-in-Boston-instead and move on with your life, before money gets in the way.

That said, every story is different. Just because all I made for borski was a silly logo, doesn't mean that this Cruise fellow didn't make a more significant contribution. For better or worse, it looks like that story will play out rather publicly now.

I do kinda miss the rivets ;)

It will be very interesting to watch this play out.

It doesn't matter who creates it, any IP created while he's a "founder" he owns a share in.

How could you possibly ever say that?

According to who?

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