[tyre]

Quite likely. In later rounds, founders are often strongly encouraged to take money off the table by selling equity.

This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company. Ramen-profitable is good in the short term, but time becomes increasingly valuable as a company grows.

[bsder]

> This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company.

Uh, no. It's so that the founders won't sell the company at a mere 4-5x rather than then 20-100x that the VC's want.

If it was genuinely about the company, they'd let all the initial people take some stock off the table. Instead they only allow the people who could sell the company to take stock off the table.

Big difference.

[kolbe]

This is true for many companies, but in the case of gross negligence[1], simply the action of her cashing out could be securities fraud and/or grounds for clawing back the money she took out.

[1] which I'm not accusing Holmes of, but it's not out of the question, either.

[kzhahou]

It's common and its bullshit. If founders take from funding then so should employees. They should be able to stop worrying about money as much as the founders.