Days after AI coding startup Windsurf introduced that it’s being acquired by Cognition, Windsurf exec Jeff Wang took to X to supply extra particulars in regards to the drama and uncertainty across the deal.
Windsurf was beforehand reported to be in acquisition talks with OpenAI, however that deal fell aside, with Google DeepMind as a substitute hiring the startup’s CEO Varun Mohan, co-founder Douglas Chen, and a few of its prime researchers. Google would reportedly license Windsurf’s expertise as a part of the $2.4 billion deal — however not take an fairness stake within the firm.
This appeared like the most recent in the pattern of “reverse acquihires,” by which giant tech firms search to keep away from antitrust scrutiny by hiring key startup group members and licensing their expertise, relatively than buying startups outright.
However what occurs to the startups and the staff who get left behind? As we mentioned on the most recent episode of Fairness, one startup founder in contrast the departing Windsurf executives to a captain abandoning his crew on a sinking ship.
Wang, who had been Windsurf’s head of enterprise, turned the corporate’s interim CEO after Mohan’s departure. In his submit on X, he supplied some sympathy to Mohan and Chen, who he described as “nice founders” in a scenario that “should have been tough for them as effectively.”
Nonetheless, Wang recounted an all-hands assembly on Friday, June 11, the place most group members have been anticipating to listen to in regards to the OpenAI acquisition. As an alternative, he needed to share the information in regards to the Google deal and ensuing departures.
“The temper was very bleak,” Wang mentioned. “Some individuals have been upset about monetary outcomes or colleagues leaving, whereas others have been nervous in regards to the future. A couple of have been in tears, and the Q&A had been understandably hostile.”
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In Wang’s view, though the corporate “had misplaced some nice individuals and brought a critical blow to morale,” it nonetheless had “all of our IP, product, and robust expertise together with a superb [go-to-market] machine.” So Windsurf might nonetheless attempt to increase more cash, promote, or simply preserve going.
That night, nevertheless, Wang heard from Cognition executives Scott Wu and Russell Kaplan, and he mentioned Windsurf management “took the Cognition strategy very severely from the beginning and launched proper into negotiations.” In his telling, what adopted was a frantic weekend of discussions with Cognition, whereas contemplating inbound curiosity from different potential acquirers and assembly with Windsurf’s remaining engineers to persuade them to not depart. (And as all that was taking place, “the timeline was exploding with memes and commentary.”)
The 2 firms are an excellent match, Wang argued, partially due to complementary groups.
“Whereas [Cognition] had overinvested in engineering, they’d frankly underinvested in GTM and Advertising and marketing, and our groups in these features are nothing in need of world class,” he mentioned. “Alternatively, we now have been lacking a Core Engineering group, and there’s no higher group of AI engineers than the lineup Cognition has assembled.”
Plus, Wang mentioned he and Wu (pictured collectively above) have been aligned on the necessity to “maintain all Windsurf workers.”
“That resulted in a key a part of the deal: structuring it to provide a payout to each worker, to waive all cliffs, and to speed up all vesting for Windsurf fairness,” he mentioned.
The acquisition settlement was apparently signed at 9:30am on Monday morning, introduced to the group shortly afterwards at one other all-hands, then introduced to the general public shortly after that.
In an interview with Bloomberg, Wang described that Friday all-hands as “in all probability the worst day of 250 individuals’s lives,” adopted Monday by “in all probability one of the best day.”
