Shiffman v Sleeping Duck is a tale of an atypical investment
The closely watched court case has provided much more than just an insight into the critical relationship between investors and founders of startup companies.
The highly anticipated court case between Melbourne entrepreneur Adir Shiffman and online mattress firm Sleeping Duck promised to offer rare insights into the crucial relationship between investors and founders in the high-octane world of startups.
But the trial, which is now on hiatus until the end of the month when closing arguments will be heard, has provided much more than that. It has served up a reminder of the critical importance of iron-clad shareholder agreements in business, as well as a glimpse into Shiffman's atypical investment style.
Shiffman, a well known figure in Melbourne startup circles, is suing Sleeping Duck, the online mattress business he invested in. Shiffman acquired a 10% stake in the company for $100,000 and an option to acquire another 10%.
He alleges the founders froze him out of the company, leaving him unable to realise his investment. He alleges he was was subsequently diluted when the company issued shares to other investors without his knowledge, and is seeking orders to restore his 20 percent shareholding in Sleeping Duck, or damages.
