[tonictato]

I’d love to know the internals here. Is equity being split? Seems like a legal minefield to split a company like this.

Amp was built by Sourcegraph, so I assume all investors and employees of Sourcegraph now get equity in Amp?

[traceroute66]

No insight here either, but I would guess it is a spin-off ... mostly because it is a US company and in the US spin-off's are generally tax free to both company and shareholders.

Spin-off is where the parent company creates a subsidiary and distributes the shares in the subsidiary to the existing shareholders. So the shareholders end up holding shares of two companies. Share allocation is done on a pro-rata basis so each shareholder still has the same exposure they did before.

[foota]

I have no insight, but I would assume it's a 1-1 sort of split, that is that everyone that previously had one share of sourcegraph now has one share of sourcegraph and one of amp? That seems like the least legally fraught way to do it.

[jeeyoungk]

yes that is easiest; or just be a 100% owned subsidiary. (that's what say, waymo is).

the good thing is that you afterwards the cap table of the subsidiary or the spunoff can evolve (ex: waymo / amp can raise money independent of the parent company).

[Touche]

Why is that preferable to just pivoting?

[SR2Z]

Because Sourcegraph is a viable business in its own right. Small companies find it challenging to do multiple things well, and it's normally better for them to spin off promising ideas that aren't directly part of their main product.

[foota]

Presumably they wanted to continue working on sourcegraph? Or maybe they want to have something left if amp flops?