Alexander Paykin- Corporate Power Struggles: Protecting Founders From Boardroom Coups

Oh, absolutely.

And you know what? It is one of those things that's much better to watch from the sidelines than be a part of.

And spoiler alert, the takeaway is gonna be that have your lawyer review your corporate documents before you think you're in charge.

But picture this.

A founder goes ahead and creates a company, has builds everything from scratch, brings in investors, and then suddenly receives notice that the board plans to remove him as CEO.

Now, his first reaction's gonna be, "They can't do that.

I own the majority of the company." But ownership, a board seat, and the CEO position are all separate legal rights.

So whether you can prevent that vote depends on how these rights were structured when the company was formed and financed.

I'm sure you've seen, you know, news back in, a few years ago, when Tesla was right there floundering on possible success, and Elon Musk would do something stupid and sh- controversial, and there was always the talk of the board's gonna remove him as CEO, they're gonna remove him as CEO.

Well, ultimately, they didn't, but at the same time, even, even when you're the guy that runs the whole thing and that everybody looks to to keep running the whole thing, you could still get pushed out.

Yeah.

And-

I just recently read a biography of Steve Jobs.

They did push him out.

Yeah.

Isn't that amazing?

Yeah.

Um, and so many founders have that happen to them.

If you remember the, uh, what's you call? Oh, that movie about Facebook.

Remember about Mark Zuckerberg and how he pushed out one of his co-founders in a very clever-

Yep

... dilution scheme? Well, often you don't even need-

Yeah, Social Network

... a very clever di...

Yep, yeah, that's the one.

Oh, absolutely.

And you know what? It is one of those things that's much better to watch from the sidelines than be a part of.

And spoiler alert, the takeaway is gonna be that have your lawyer review your corporate documents before you think you're in charge.

But picture this.

A founder goes ahead and creates a company, has builds everything from scratch, brings in investors, and then suddenly receives notice that the board plans to remove him as CEO.

Now, his first reaction's gonna be, "They can't do that.

I own the majority of the company." But ownership, a board seat, and the CEO position are all separate legal rights.

So whether you can prevent that vote depends on how these rights were structured when the company was formed and financed.

I'm sure you've seen, you know, news back in, a few years ago, when Tesla was right there floundering on possible success, and Elon Musk would do something stupid and sh- controversial, and there was always the talk of the board's gonna remove him as CEO, they're gonna remove him as CEO.

Well, ultimately, they didn't, but at the same time, even, even when you're the guy that runs the whole thing and that everybody looks to to keep running the whole thing, you could still get pushed out.

Yeah.

And-

I just recently read a biography of Steve Jobs.

They did push him out.

Yeah.

Isn't that amazing?

Yeah.

Um, and so many founders have that happen to them.

If you remember the, uh, what's you call? Oh, that movie about Facebook.

Remember about Mark Zuckerberg and how he pushed out one of his co-founders in a very clever-

Yep

... dilution scheme? Well, often you don't even need-

Yeah, Social Network

... a very clever di...

Yep, yeah, that's the one.