As all of you may have read, when presented with BILLION dollar offers from both Google and Facebook, the founders at Snapchat (a too hot to handle startup), simply replied with a big fat NO, not interested. At that moment, many jaws dropped in the startup ecosystem; VCs found themselves whispering “w…t…f;” and others- those entrepreneurs trying to get a speck of notoriety, found themselves in complete disbelief.
Who says NO to that? Well, Snapchat did and somebody was paying close attention. It turns out that this year the team at Snapchat has been battling with a dirty little secret, an alleged ousted founder that is suing Snapchat for his share of the insanely immense valuation pie.
The surprise co-founder is relying solely on email communications and oral confirmations made by the current Snapchat founders. Apparently, oral promises have given the Snapchat team a run for their money. Now, instead of being able to cite founder documents or the like, the founders have to battle it out in court to settle the equity dispute. That billion-dollar offer may come in handy now.
Bottom line: Unless you mean it, do not say it. Oral promises can come back to bite you in the startup pie butt. Hence, look into formal (written) equity agreements and aim to avoid unnecessary founder disputes.
You can check out the deposition drama here.