On: Why First Round Capital funded a lawsuit

[wpietri]

The way they describe the deal structure, my guess is yes.

The entrepreneurs held stock in TechForward, which sold its assets to a third party but kept the lawsuit. Total investment was only $5.7 million (per Crunchbase), but the lawsuit payout is $27 million. The investors put in more money (hundreds of thousands) at unknown terms, but my guess is that this means a modest number of millions for each of the two founders.

[gsibble → wpietri]

Depends upon liquidation preference, tranches, stock classes, etc.. We'll never know unless we are specifically told.

[wpietri → gsibble]

Sure. I'm assuming typical to somewhat-worse-than-typical terms. They could have gotten screwed, but there's no particular reason to think they did.