Golden Angels recently had a very good exit with a young company on the west coast. As investors, we were ultimately pleased with the outcome. As it turns out, the founder isn’t very pleased. Unfortunately, he has initiated a lawsuit against the acquirer over losing compensation tied to the exit.
In retrospect, he picked one potential acquirer too early and got distracted by the prolonged negotiating period. He stopped focusing on selling at the potential acquirer’s suggestion (so we can go hard after the market when we close) and when he finally, after months of negotiations, was out of cash they dropped their offer and added a founder holdback. No one is starving to death (we did fine) but there’s a real underlying buyer-driven process here that often goes on in these situations. Read the full story here.