OpenAI’s Windsurf deal is off, and Windsurf’s CEO is going to Google

How does this happens?

They raised A, B, and C round (according to CrunchBase), and then the founders just walk away and get a job/deal at Google?

Nepotism.

The same set of rules that apply to you and me are not universal.

Perhaps it as combination of how much founders were diluted and how much they are being offered upfront. We are hearing about $100M signing bonuses.

It is hard to say no when Google/Meta gives you say $100M upfront and hundreds more if not Billion+ in RSUs. After 3 rounds it is not unreasonable to have only 5-10%.

10% of a company worth a few billion burning a lot of cash, that needs to keep raising more rounds i.e more dilution, may have less value than RSUs from multi-trillion dollar publicly traded liquid tech company today.

It is also quite hard to raise $5-10+Billion in cash. There are only handful of startups which have ever done so

Very few funds/investors can afford to do so large rounds. This was SoftBank's thesis for most of last decade, compete by just outfunding competing products in a market.

The deal for the founders may not have been as good as what Google offered. They may only hold 10% after those rounds, a serious part of the acquisition price could go to liquidation preferences of the VCs and the deal is mostly in OpenAI stock instead of cash. Not that hard to imagine the Google option offering them much more actual cash right now.