Can someone please clarify the ethical as well as legal ramifications of subverting investors by starting a new company?
For example: You start company A, in market M. Your investors give you 5k in exchange for 50%. You spend your 5k learning about market M and now you're diluted. What's stopping you from creating company B, to attack same market, but from an enhanced perspective?
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Can someone please clarify the ethical as well as legal ramifications of subverting investors by starting a new company?
For example: You start company A, in market M. Your investors give you 5k in exchange for 50%. You spend your 5k learning about market M and now you're diluted. What's stopping you from creating company B, to attack same market, but from an enhanced perspective?
In many cases, there are contracts in place to prevent exactly that.
When I cashed out of my first startup, I was legally prohibited for working in that domain for X years.