I've actually worked through a similar situation for a prior startup. We were initially funded by a large, hospital system (non-profit) who wanted to foster innovation and a startup mentality. After getting started, it became clear that it was effectively impossible for us to operate like a startup under a non-profit. Namely, traditional funding routes were neigh impossible and the hospital didn't want direct ownership.

It's been many years, but the plan was essentially this:

* The original, non-profit would still exist

* A new, for-profit venture would be created, with the hospital having a board seat and 5% ownership. Can't remember the exact reason behind 5%. I think it was a threshold for certain things becoming a liability for the hospital as they'd be considered "active" owners above 5%. I think this was a healthcare specific issue and unlikely to affect non-profits in other fields.

* The for-profit venture would seek, traditional VC funding. Though, the target investors were primarily in the healthcare space.

* As part of funding, the non-profit would grant exclusive, irrevocable rights of it's IP to that for-profit venture.

* Everyone working for the "startup" would need to sign a new employment contract with the for-profit.

* Viola! You've converted a non-profit into a for-profit business.

I'm fuzzy on a lot of details, but that was the high level architecture of the setup. It's one of those things where the lawyers earn a BOAT LOAD of money to make sure every technicality is accounted for, but everything is just a technicality. The practical outcome is you've converted a non-profit to a for-profit business.

Obviously, this can't happen without the non-profit's approval. From the outside, it seems that Sam has been working internally to align leadership and the board with this outcome.

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What will be interesting is how the employees are treated. These types of maneuvers are often an opportunity for companies to drop employees, renegotiate more favorable terms, and reset vesting schedules.