@derek

Since there are a lot of rumors about M&A these days, a brief primer on founder obligations: Founders, as CEOs and board members, are bound by fiduciary duties (FD). FWIW, these are akin to the duties you have with regard to "powers of attorney" for an ailing loved one. There are two fundamental types of FD: duty of care, duty of loyalty. Duty of care: pay attention, know your business, act with competence. Duty of loyalty: you serve the interest of shareholders. Note: duty of loyalty is to ALL shareholders, common and preferred, not just preferred holders (investors). Common holders usually include employees and the founders themselves. Most people get this wrong: under the duty of loyalty, the board is primarily loyal to common over preferred (because preferred holders usually have contracts to protect their interests). In regards to M&A, there are also specific case laws that applies that you may have heard. Normally, a rule known as "business judgment" applies, which is essentially "as long as you prove to be competent and act with a reasonable strategy, you're good." In M&A, there are two primary edge cases: Revlon & Unocal. Revlon: a sell is *inevitable*, and you get a really good offer that you don't like for whatever reason. Revlon states that your job is to maximize shareholder value. This is a very narrow scope: active bids are coming in, ignore long-term strategy, and there's enhanced scrutiny on your application of the business judgment rule. Unocal: you receive a bid you don't like, you can defend yourself as a company from it. Finally: the 13th amendment applies to corporate law. You, as a natural person, may not be enslaved by another person, which includes corporations. Source: a few horror stories that I'd be happy to share with you over whiskey

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