If a company goes under, the investors will want to sell off the IP, open sourcing everything would make that IP less valueable. There must be some blanket clause in the term sheet to cover that, right? Ie: founders won’t do anything which will materially hurt the company without board approval (or something, I am no where close to a lawyer, this is all conjecture)
Early stage VCs make money on the big winners, not on the tail end of companies that don’t exit for 100x. For the most part, except for patents the IP is worth less than the Aeron chairs at the end.
At this stage, if they can't raise a series A I'd assume they still have a majority of the "board" to themselves.
I'm aware I'm leaving out a lot of detail, but it's not clear to me what has become public knowledge and what has not and I happen to know some people that were involved.
