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The Windsurf and Scale deals underscore a fragile reality for startup employees
The Windsurf and Scale deals underscore a fragile reality for startup employees

Yahoo

time6 days ago

  • Business
  • Yahoo

The Windsurf and Scale deals underscore a fragile reality for startup employees

When an employee joins a startup, there's a social contract of sorts. The employee takes a risk, joining a new company, in many cases one that doesn't have proven revenue or a secure future. They join for the mission, the chance to take a seat on a possible rocket ship, and to work with a founder or set of cofounders they believe are exceptional. And of course, they join for the upside—the belief that the equity in a company that they take on as part of their compensation will actually be worth something in the end, that the founders they've risked their careers for will advocate for as many of their people as possible in the event of an exit. 'If that social compact fails, the whole system fails,' said Daniel Dart, founder of Rock Yard Ventures. And this social contract has been under pressure in recent days and weeks, as multi-billion dollar acquihires take CEOs and cofounders away from the companies they've founded—leaving behind companies with uncertain futures and in many cases hundreds of employees or more. We've seen two notable cases in quick succession: Meta's $14 billion deal for 49% of Scale AI, which moved Scale CEO and cofounder Alex Wang to Meta, and Google's $2.4 billion acquihire of Windsurf, a deal that left many employees behind—who then soon would see the remains of their company acquired by Cognition. People are mad about Scale, sure—the company laid off about 200 staff members this week—but people are really incensed about Windsurf, a deal that excluded about 250 employees, fostering concerns not only about equity (in all senses of the word) but for what this means about the relationship between founders and their employees. 'I think the cascading net effect of this sort of situation is that it's actually going to change what those early conversations with employees are like at startups,' said Dart. To Amplitude CEO and cofounder Spenser Skates—who's conducted both acquihires and acquisitions really recently—the Windsurf deal stands out as egregious. He likens it to a captain abandoning ship, comparing the situation to Francesco Schettino, who in 2012 fled the capsized Costa Concordia, leaving behind passengers and crew. Thirty-two people died in the disaster. Incidents like Windsurf, Skates says, show why it's more important than ever for employees to think hard about the founder they're throwing their lot in with. 'I think employees should ask the CEO and founders straight up: Are you going to leave? It's crazy you have to do that,' said Skates. 'But I think the character and integrity of the founders matters way more than ever.' I asked Henry Shi, cofounder, if startup employees will start thinking differently about their hiring terms as deals like this happen more frequently. 'Yes, but unfortunately I'm not sure if they have many options or leverage,' Shi wrote via email. 'Especially given the market dynamic between labor and capital as we approach economic AGI, early employees may not have that much leverage—except by starting their own companies.' Because equity is what a founder makes it. We'll see more of this as the M&A marketplace continues at 'AI speed,' said David Shim, CEO and cofounder of via email. And we have, in fact, seen deals of this ilk before, from Microsoft's acquihire of Inflection to Amazon's of Adept. And, in the end, the fact that social media was so abuzz may actually be a good thing for startup employees. It means people still want the innovation economy to benefit all its participants. Given that antitrust regulators don't seem poised to police these kinds of deals anytime soon, the public reaction may indeed be one of the few guardrails. 'What we saw with the Windsurf deal was the ecosystem getting up in arms about the fairness for employees, which should create some sense of comfort,' said Yohei Nakajima, general partner at Untapped Capital. 'While breaking up companies isn't necessarily bad, it's important that everybody gets their fair share—and especially if these types of deals continue, I'd hope to see more standards around how these get treated.' See you Monday, Allie GarfinkleX: @agarfinksEmail: a deal for the Term Sheet newsletter here. Sara Braun curated the deals section of today's newsletter. Subscribe here. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Wrexham City of Culture 2029 bid backed by business leaders
Wrexham City of Culture 2029 bid backed by business leaders

Leader Live

time09-07-2025

  • Business
  • Leader Live

Wrexham City of Culture 2029 bid backed by business leaders

Business leaders have thrown their backing behind the bid, believing it could deliver a huge economic, social, and cultural boost to the region. Their support was voiced at a recent meeting of Wrexham Business Professionals, where Ken Skates MS, the Welsh Government's Minister for North Wales and Transport, described the campaign as a major opportunity for the city. Mr Skates said: "The stars are aligning perfectly for us. "The City of Culture campaign is a huge opportunity to draw in investment of £200 million, boosting local pride and in terms of the value of local, national and global exposure." Wrexham narrowly missed out on the title last time, losing to Bradford, which has since reported an estimated £700 million economic boost from its year as City of Culture. Wrexham County Borough Council, with the backing of the Welsh Government, is now determined to secure the title in 2029. Mr Skates said: "It can bring new employment opportunities with thousands of new jobs, improve transport links locally and nationally with massive benefits to Wrexham and the whole of North Wales. "I want to appeal to you to support this ambitious bid no matter what happens in next year's Senedd elections." He highlighted the long-term benefits of the Wrexham Gateway project, which is set to transform the city's transport infrastructure by 2029. Mr Skates said: "By 2029 we will see Wrexham's railway station redeveloped, new office and leisure blocks, a transport interchange, an events space and a green corridor into the city centre. "Not long ago we'd be celebrating if Wrexham got a new M&S and now look at what we're on the verge of. "The football team is repeatedly winning promotion and with your support Wrexham can be crowned City of Culture too." Amanda Davies, director of Wrexham's City of Culture bid, outlined the campaign at the meeting. Ms Davies said: "This would be worth a shedload of money for Wrexham and for its cultural regeneration. "The City of Culture competition is run by the UK Government's Department of Culture, Media and Sport every four years and winning it has made a phenomenal difference to Bradford." She emphasised that winning the title could unlock £200 million in funding and help revitalise under-supported areas of the city. Ms Davies said: "There are areas of Wrexham that are in dire need of support and that's where we can make a difference and that would be transformational." The winner will be announced in May 2026. Caroline Platt, managing director of Platts Agricultural Ltd in Llay, said the title could help attract and retain talent. Ms Platt said: "Wrexham has a very strong case and this is about getting behind the bid and keeping the momentum going. "It would be huge for us to win. "It would encourage talent to the area and help fill the skills gap while helping us retain staff and create more job opportunities." READ MORE: Readers recall fond memories of being refereed by 'legend' Brian as he wins award Ian Edwards, a member of Wrexham Business Professionals, said improved transport connectivity would benefit businesses across the region. Mr Edwards said: "Winning the title has to be beneficial for anyone running a business in Wrexham." Louise Harper, another member of the group, said the bid reflects the region's ambition. Ms Harper said: "Getting behind the City of Culture bid chimes perfectly with Wrexham Business Professionals' mission to work together to promote regional prosperity and shine a light on the enterprise and expertise that exists in the region."

Tory conference to be held in ‘smallest house in the world', Welsh minister jokes
Tory conference to be held in ‘smallest house in the world', Welsh minister jokes

Leader Live

time02-07-2025

  • Business
  • Leader Live

Tory conference to be held in ‘smallest house in the world', Welsh minister jokes

Ken Skates, the cabinet member for North Wales, has said the Welsh Conservatives will fit 'in the porchway' of The Smallest House after next May's Welsh parliament election, during questions in the Senedd on Wednesday. The home, which sits on Conwy's seafront in north Wales, is believed to be the smallest house in the United Kingdom. Measuring just 72 inches wide, the house, which has not been lived in for some time, has become a tourist destination. The minister's comments followed a question about the impact a proposed tourism levy would have on the north Wales economy from Gareth Davies, Tory MS for the Vale of Clwyd. The Visitor Levy Bill, which is going through the Senedd, will allow councils to charge up to £1.30 per person per night for staying in tourist accommodation, with the money going towards local infrastructure. Mr Skate's joke also comes 10 months ahead of the next Senedd election, where recent polls have put the Tories in a predicted fourth place. The Westminster party was also wiped out in Wales in the general election last year, going from 14 seats to zero. However, Labour is also expected to face a difficult battle in May's elections. Recent polling by Survation placed them at 27%, with Reform and Plaid Cymru close behind on 24% each, while previous YouGov polling had the incumbent party in third place. Mr Skates told Mr Davies he visited Conwy following the Welsh Labour Conference, which was held in Llandudno last weekend. Addressing Mr Davies, he said: 'At the end of the conference, I thought I'd just spend a little more time in the area. 'I actually went over to Conwy as well, which is a fabulous place too. 'You'll be aware that it has the smallest house in the world on the seafront there. 'I was told that your party is going to be holding your post-election conference in the porchway, in that particular tourist attraction next year.' Mr Skates added that he would be discussing the visitor levy with the north Wales business council on Friday, calling the fee an 'opportunity,' which he insisted had been welcomed in other areas like Manchester. Mr Davies said he 'appreciates the sharpness and the wit of the Cabinet Secretary' but argued the levy could lead to a decrease in people staying in Wales, with many councils having already ruled out implementing it.

Tory conference to be held in ‘smallest house in the world', Welsh minister jokes
Tory conference to be held in ‘smallest house in the world', Welsh minister jokes

South Wales Guardian

time02-07-2025

  • Business
  • South Wales Guardian

Tory conference to be held in ‘smallest house in the world', Welsh minister jokes

Ken Skates, the cabinet member for North Wales, has said the Welsh Conservatives will fit 'in the porchway' of The Smallest House after next May's Welsh parliament election, during questions in the Senedd on Wednesday. The home, which sits on Conwy's seafront in north Wales, is believed to be the smallest house in the United Kingdom. Measuring just 72 inches wide, the house, which has not been lived in for some time, has become a tourist destination. The minister's comments followed a question about the impact a proposed tourism levy would have on the north Wales economy from Gareth Davies, Tory MS for the Vale of Clwyd. The Visitor Levy Bill, which is going through the Senedd, will allow councils to charge up to £1.30 per person per night for staying in tourist accommodation, with the money going towards local infrastructure. Mr Skate's joke also comes 10 months ahead of the next Senedd election, where recent polls have put the Tories in a predicted fourth place. The Westminster party was also wiped out in Wales in the general election last year, going from 14 seats to zero. However, Labour is also expected to face a difficult battle in May's elections. Recent polling by Survation placed them at 27%, with Reform and Plaid Cymru close behind on 24% each, while previous YouGov polling had the incumbent party in third place. Mr Skates told Mr Davies he visited Conwy following the Welsh Labour Conference, which was held in Llandudno last weekend. Addressing Mr Davies, he said: 'At the end of the conference, I thought I'd just spend a little more time in the area. 'I actually went over to Conwy as well, which is a fabulous place too. 'You'll be aware that it has the smallest house in the world on the seafront there. 'I was told that your party is going to be holding your post-election conference in the porchway, in that particular tourist attraction next year.' Mr Skates added that he would be discussing the visitor levy with the north Wales business council on Friday, calling the fee an 'opportunity,' which he insisted had been welcomed in other areas like Manchester. Mr Davies said he 'appreciates the sharpness and the wit of the Cabinet Secretary' but argued the levy could lead to a decrease in people staying in Wales, with many councils having already ruled out implementing it.

Tory conference to be held in ‘smallest house in the world', Welsh minister jokes
Tory conference to be held in ‘smallest house in the world', Welsh minister jokes

The Herald Scotland

time02-07-2025

  • Business
  • The Herald Scotland

Tory conference to be held in ‘smallest house in the world', Welsh minister jokes

The home, which sits on Conwy's seafront in north Wales, is believed to be the smallest house in the United Kingdom. Measuring just 72 inches wide, the house, which has not been lived in for some time, has become a tourist destination. Welsh North Wales and transport minister Ken Skates (Welsh Government/PA) The minister's comments followed a question about the impact a proposed tourism levy would have on the north Wales economy from Gareth Davies, Tory MS for the Vale of Clwyd. The Visitor Levy Bill, which is going through the Senedd, will allow councils to charge up to £1.30 per person per night for staying in tourist accommodation, with the money going towards local infrastructure. Mr Skate's joke also comes 10 months ahead of the next Senedd election, where recent polls have put the Tories in a predicted fourth place. The Westminster party was also wiped out in Wales in the general election last year, going from 14 seats to zero. However, Labour is also expected to face a difficult battle in May's elections. Recent polling by Survation placed them at 27%, with Reform and Plaid Cymru close behind on 24% each, while previous YouGov polling had the incumbent party in third place. Mr Skates told Mr Davies he visited Conwy following the Welsh Labour Conference, which was held in Llandudno last weekend. Addressing Mr Davies, he said: 'At the end of the conference, I thought I'd just spend a little more time in the area. 'I actually went over to Conwy as well, which is a fabulous place too. 'You'll be aware that it has the smallest house in the world on the seafront there. 'I was told that your party is going to be holding your post-election conference in the porchway, in that particular tourist attraction next year.' Mr Skates added that he would be discussing the visitor levy with the north Wales business council on Friday, calling the fee an 'opportunity,' which he insisted had been welcomed in other areas like Manchester. Mr Davies said he 'appreciates the sharpness and the wit of the Cabinet Secretary' but argued the levy could lead to a decrease in people staying in Wales, with many councils having already ruled out implementing it.

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