Shiffman makes final $60m argument in Sleeping Duck trial
The closing arguments of the Shiffman v Sleeping Duck trial served up a question familiar to all investors and founders: how do you value a startup?
The final moments of the closing arguments in the Shiffman vs Sleeping Duck lawsuit served up a question that founders and investors never find it easy to agree upon. How do you value a startup?
It was fitting end to a trial that has intrigued the startup community and offered many lessons about the relationship between investors and founders.
Shiffman is suing Sleeping Duck, the online mattress business he invested in, claiming that he was frozen out of the company or “oppressed”, and that subsequent failed attempts at sales, partial sales and an IPO had meant he could not realise his investment. Shiffman also made an offer to buy out the company himself before proceedings started, but his offer was rejected.
Shiffman originally acquired a 10% stake in the company for $100,000 and an option to acquire another 10%. But he claims his shares were diluted when another minority investor, Prateek Bandopadhayay had, unbeknownst to him, been given a 10% stake through a “secret arrangement”.
