Startups

Common stock shareholders

Microsoft singsong13
Feb 9

Ok so if a startup got acquired or acquired and as a common stock shareholder, what rights do I have ? Right now, I don’t even know what the terms of acquisition were. I have heard zero communication from investors or officers. Zero. Is that a normal thing? Do officers, main investors or acquirer have any fiduciary duty to inform all common stock shareholders of the outcome and what is worth now even if its $0?

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  • New / Eng
    errfileno

    NewEng

    BIO
    Software Engineer. 15yoe. Seattle. $205k TC
    errfilenomore
    My previous gig underwent private acquisition after I left. I was a common-stock shareholder at the time. About 30 days after the acquisition was publicly announced, I received a thick packet by FedEx indicating the terms of the deal, from which I could derive the effect of the deal on me personally. The packet included a request for me to sign something accepting the deal (which was less than favorable to common-stock shareholders), and indicated that and majority of the shareholders would need to accept the deal for it to go through, but it was clear that the preference shares outweighed common stock shares enough that resistance was futile.

    Reach out to HR/Legal to ensure that they have your current physical address.

    YMMV.
    Feb 103
    • New ahsvdv
      Out of curiosity, do you know why the terms were less than favorable to common shareholders? Was it simply because the startup sold at less than its preferred valuation, or were there some other investor tricks such as high liquidation preferences or something even more shady?

      Thanks
      Feb 10
    • New / Eng
      errfileno

      NewEng

      BIO
      Software Engineer. 15yoe. Seattle. $205k TC
      errfilenomore
      @ahsvdv - sold for less than capital it had raised, and the VCs had worked safety nets in to ensure that their actual capital was paid back before our sweat capital. Many lessons learned there.
      Feb 10
    • New ahsvdv
      Makes sense. Thanks for replying.
      Feb 10
  • GoodRx BobAxelrod
    It's possible a deal was agreed to but not actually completed. So you might not get final details for a bit.
    Feb 91
    • Microsoft singsong13
      OP
      Deal was all done and announced publicly.
      Feb 9
  • Google rubbishing
    For common stock shareholders, you should try to see if you could get hold of the docs of shareholders meeting. That should have terms of sale and price.
    Feb 91
    • Microsoft singsong13
      OP
      It’s a private acquisition
      Feb 9
  • Capital One EXwk33
    They dont need to tell shareholders until the deal is public. Although they do need to work in your best interest. If they don't sell for a fair value the stockholders have the right to sue
    Feb 90
  • New DvVM00
    nope. you will not be able to learn anything
    Feb 101
  • LinkedIn bored🐷
    Are you sure you own common shares instead of options/rsu?
    Feb 91
    • Microsoft singsong13
      OP
      Yes sure. Common stock purchased by exercising options.
      Feb 9
  • AIG / Product
    Raging

    AIGProduct

    PRE
    Deloitte Digital
    BIO
    Counseling CxOs for AI-first strategy !
    Ragingmore
    Corporate Actions ensure your money is sent to your state's "unclaimed money" . State implies the state of the registered address with them at the time of corporate action.

    It's possible your address with them was not updated by your broker's crappy integration. Check with your state's unclaimed money dept.

    I found some 💰 in my prior states for other reasons.
    3d0
  • Microsoft singsong13
    OP
    Thanks for the note. I’m expecting something very similar
    Feb 100
  • New / Engshsy
    Did you try contacting HR at your old company? They should be able to put you in touch with someone who can give an answer! Please let us know how you solve the issue, I’m really interested since, like you, I have common shares from a previous startup.
    Feb 100

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