In a recent Business Insider article on the unsettling new deal structures reshaping Silicon Valley, Alpha Partners Managing Partner Steve Brotman weighed in on why employees, not just VCs, need to start asking the hard questions.
“In light of what we just saw with Windsurf, it’s crucial to understand the ownership dynamics,” said Brotman. “You don’t want to be working 100-hour weeks only to realize your options are underwater or your exit upside is capped.”
The article explores how Big Tech firms are bypassing traditional acquisitions in favor of licensing IP and recruiting key talent, a strategy that offers speed and stealth, but often leaves early employees and shareholders behind. In the case of Windsurf, a $3 billion deal with OpenAI fell apart. Google instead licensed the company’s IP and hired away its CEO and engineering leads. The remaining employees were sold off to another startup.
This shift, echoed in recent moves by Meta, Microsoft, and others, marks a growing trend: fast, founder-led exits that skip regulatory delays and sometimes skip over the teams who helped build the company.
Brotman emphasizes that employees now need to perform the same level of diligence that investors do. “Ask hard questions about runway, revenue, burn, and investor syndicate quality,” he advises. “Who’s on the board? Are they structured for long-term growth or a quick flip?”
At Alpha Partners, we believe transparency and strong governance aren’t just investor checkboxes; they’re foundational for long-term value. When founders hold all the cards, it’s critical that employees and late-stage investors know exactly what kind of game they’re walking into.
Not all exits are created equal. And not all founders play fair.
Read the full article here.
