[daveying99]

Great. So First Round Capital is pushing idea that they stood with David against Goliath and won teaching a lesson to Big Co. Did the entrepreneurs see any of the money?

[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]

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

[wpietri]

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.

[alexatkeplar]

I was thinking the same thing. Without knowing whether the founders agreed with the Board decisions to a) share the models with Best Buy and b) pursue an ultimately ruinous legal claim, it's hard to know if First Round were part of the solution or part of the problem...

[saraid216]

The way it's phrased makes it sound like the Board was the reluctant party, rather than the founders.

[tbrooks]

Why should they?

If the entrepreneurs risked their own cash and the possibility of losing the case, they should be entitled to the money. But they didn't, so they're not.

[Evbn]

Equity.