[yangez]

> When the Internet bubble burst, the company underwent rocky times. By 2000, [the founder] was gone from the company, as were four other members of his founding team.

> For the next decade, Bloodhound recovered and slowly grew, raising seven more rounds of financing. In April 2011, the company was sold for $82.5 million.

11 years is a long time. How much do they think they deserved?

[cabinguy]

My thinking is a little different than most of those who have commented...probably because I'm a bootstrapper.

After reading all of these comments - my thought process goes like this: If the founders output from 11 years ago is worthless, why isn't the investors' money from 11 years ago equally worthless?

If the founders' sweat equity didn't create value, the early VC money didn't either. Should the early VC's lose their investment, or just the founders?

I'm not naive, I understand that these deals are structured this way...I'm just saying that the structure is bullshit (imo).

[saumil07]

That's not quite right. It's unclear how much total the VCs put in, at least from the article. But it sounds like they continued to fund the company while the founders' involvement ceased over 10 years ago.

"For the next decade, Bloodhound recovered and slowly grew, raising seven more rounds of financing." <-- if the insiders participated in follow-on rounds they stayed involved all the way through. Once again, that's what seems to be indicated but it isn't spelled out.

[FireBeyond]

Right. The founders were there five years, then pushed out during the dotcom crash, then the company made a substantial “pivot” (in the same field, but the product being offered and created by the founders was gone, and new ones introduced).

Two years after the founders are gone, the company begins to make money again.

Then 11 years, the company is sold for a lot of money.

And the founders feel they are entitled to a large chunk of that, despite their non-involvement in operation of the company and their diluted ownership (unsurprising, but common with multiple rounds of financing that they were in favor of).

It’s worth noting that many of the founders claims have been dismissed as egregious, lacking in evidence and otherwise.

[mathattack]

There's a problem in asking "How much did they deserve?" because there are so many hard to answer questions.

- Did they uncover some unique IP, or was the exit the work of subsequent management?

- How much did the VCs influence the exit?

- Did the founders trade downside protection for more upside?

It's hard to know the answers.

[nraynaud]

I guess in five years they worked harder than the investors in 16, since well workers work while investors put money on the table.