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0 Replies Last post: Nov 26, 2008 12:25 AM by Kovich

Investor/Previous Employee Starts a Rival Company

Aug 6, 2009 12:54 AM

Click to view pconklin's profile Start-up pconklin 1 posts since
Aug 5, 2009
My company has been in business for nealry three years. We have several vc's and one of the angel investors was actually hired for short time. After several months he wa snot working out and we needed to let him go. Thsi angel investor then teamed up with another of our investors and started a rival company. My question is do we have to provide them with sales information or an anuual report even though they are investors? They are then using the information we provide in the reports to market their business at our expense, after we've spent the labor time and capital to grab market share. Would this fall under any insider information laws that state you cannot use the information for further persoanl or business gain?

Thanks for any assistance.
Tags: advertising, consulting, design, business, business_service, funding, service, home_business, start_up, online_applications, technology, internet, marketing, wanted, business_services, business_start_up, need, web, website, new, new_business, cash, online, adsense, websites Report as inappropriate
Click to view DomainDiva's profile Mogul DomainDiva 1,732 posts since
Oct 10, 2007
1. Re: Investor/Previous Employee Starts a Rival Company Aug 6, 2009 2:02 PM
in response to: pconklin
WHAT?????

You better get an attorney and start protecting yourself and what is left of your company. Basically I am seeing that an ex employee and two investors tamed up and started a rival company? You need to try and figure out the WHY of this. How could you let this happen?

I cannot believe that you would actually entertain the thought of turning vital information over to them. Tell them to talk to your attorney. GET an attorney.

When you set your company up did you set up corporate governance? Do you have a CTO, CFO, CL (Legal)O, board advisor that is from the business community, Secy/Treasurer? Do you have any copyrights on any of your product or even have an IP (intellectual property) attorney?
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Click to view SASI360's profile Professional SASI360 5 posts since
Aug 7, 2009
2. Re: Investor/Previous Employee Starts a Rival Company Aug 7, 2009 9:56 AM
in response to: pconklin
Get an attorney. If they did not sign a noncompete contract, you may not have any recourse. In the future, be carefuly with your company information and consider having them sign a noncompete contract drawn up by an attorney.
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Click to view DomainDiva's profile Mogul DomainDiva 1,732 posts since
Oct 10, 2007
3. Re: Investor/Previous Employee Starts a Rival Company Aug 7, 2009 1:31 PM
in response to: SASI360
Non compete agreements are most of the time worth the paper they are written on. Nothing. These 'investors' should have been vetted.
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