Rick Stollmeyer built a software company from his California garage and realised a dream when he took it public in 2015 at a valuation approaching $1bn. Much of what came next seems to have been a nightmare for the former US Navy submarine officer. As a guest on an entrepreneurship podcast, he lamented the shareholders of his company who would not countenance him selling down his stock, describing his periodic divestitures as the equivalent of “sucking through a very small straw”.
Mindbody, Stollmeyer’s software business that powered the systems of gyms and fitness studios, announced just before Christmas 2018 that it had a deal to sell itself to Vista Equity Partners. The deal allowed Stollmeyer to both cash out as well as keep his job and get a stake in the privatised company. But last month, a Delaware judge ruled that he breached his fiduciary duties to the other Mindbody shareholders by putting his liquidity needs first and selling at too low a price in a leveraged buyout.
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