Hacker News user 'grellas' is also a well known and respected lawyer. He weighs in on the allthingsd leak. VC's have traditionally held all the strings, and really did put the screws to founders when they could.
In our new venture landscape, they don't. And Grellas says founder liquidity should be a matter of private negotiation, not tabloid-style exposure. He writes:
There is a long-time tension in the startup world between founders and VCs and, as someone who has worked closely with founders for nearly three decades, I can say unequivocally that it has not been the VCs who have tended to get the short end of the stick when the inequities arise. Now that fact does not justify founder abuse, if that is what happens in a given case (I say nothing about this case - we really don’t know the facts). For decades, investors categorically refused to let founders take even a penny out of the company as they were urged to "swing for the fences" to ensure that the investors got their projected minimum 10-to-1 one return on investment. And when they missed, it was the investors who would force a merger or sale of the company, take out their liquidation preference to get a return on their money, and leave founders with a zero-equity return after perhaps years of working for little or no salary and putting in 20-hour workdays in the process. This value proposition may have paid in a big way for a founders in select companies but it has also left large numbers of seriously harmed founders in its wake over the years. Today, this is changed somewhat and founders at times have opportunities to balance their risks along the way as they strike their bargains with the VCs. How, when, and to what extent they take any money out along the way is a completely legitimate issue to be fought for by founders and resisted by investors as circumstances dictate. But the overriding goal of letting founders spread some of their risk is completely bona fide. The details get resolved by the founders, the company, and the investors through private negotiation, not through a public airing. If investors choose to accept something that sounds aggressive to the rest of us, that is their calculated risk. Last I checked, they qualified as "sophisticated investors."
The really strange thing is that Chamath is a newcomer to the VC world. One wouldn't usually expect such control-oriented posturing from someone so recently removed from wearing the founder hat.
This is also the second time in as many weeks I've heard Chamath's name in the tech blogosphere. The first was about being a Facebook fool, Numair Faraz's shockingly honest short essay about how his Audio application was crushed by backroom deals. Chamath in that case was named (later redacted) as one of the Facebook PM's that coordinated Audio's demise.
Edit: Arrington, upon seeing this news, was shocked at what seemed like a crazy agenda to hurt a company materially. This seemed like some sort of hit piece. He called Palihapitiya and it turns out Chamath's assistant or friends of his assistant leaked it. Sounds like a few people will be finding it difficult to work in this town again.