Author here. I wanted to share this piece of personal and technical history from the early days of 3D graphics. The article covers the meeting on my houseboat with Jensen, Curtis, and Chris in 1993, working on biquadratic texture mapping for the NV1, and how Microsoft’s sudden pivot to triangles in DirectX nearly broke the company before their pivot to the RIVA 128.
It also digs into the paperwork anomaly I recently uncovered regarding my Technical Advisory Board options and the vesting schedule. Happy to answer any technical questions about the early 90s VR/graphics scene or the NV1 era!
The Kingdom of Tonga stood out to me. Are you still there? Why were you there? It's a very interesting place, especially for anyone not from there. I'm only adjacently aware as someone who spent most of my life in a different Polynesian country.
I was in on the ground floor of WiFi, in that around 1995 I did a significant chuck of the work that proved that WiFi works, and my work at a university lead to the formation of a company that put WiFi into the market (Radiata). The IP situation was murky. A patent holder made about $1b and the company sold for $560m (in 2000). I gather the university complained and got a good chunk of "go away" money. I could have thrown my hat in the ring: maybe I would have got something, maybe I wouldn't have. Either way, I walked away, as I judged it wasn't worth the non-financial cost. 30 years layer I still think I made the right decision. I might have been living in a nicer house, but I wouldn't have the life I have today, which I am happy with.
I don't know your situation in life, but if your experience is anything like mine I reckon you've probably made the right decision.
OP was not given all of the shares earned at the time decades ago and didn't realize that they should've been payed out, but after engaging in a lawsuit realized that the court would likely not grant the case give the statute of limitations.
Kinda like all the Sony game 'owners' not carefully reasing the legally binding contracts they're always signing realizing that they are not in fact purchasing a gauranteed lifetime access to the game.
Whether they "earned" them is disputable — the offer letter specifies one vesting schedule (25% every year), the "cover sheet" from the options agreement specifies other (25% every _quarter_).
So — the OP got the shares he was promised in the original offer letter; but later discovered that some of the documents he later got implied that the vesting schedule should be accelerated compared to what he agreed to.
I think that is probably the funniest way possible to earn a billion dollars; but whether he's "owed" that money/shares, is... up for a debate.
Plethora of reasons, but right to title is not as black and white as anyone assumes. There is no govt ledger that keeps track of who owns what, everything is always subject to interpretation. If you own a home, you likely had to purchase title insurance. If you don’t know what that’s for, look it up. It will give you the same answer to this question.
Also seems like it isn’t clear that they ever owned it. There appears to be a mistake in the contract asserting mutually inconsistent clauses, but it appears that both parties agreed on the not-owning interpretation for nearly 30 years, which might already be a far simpler contract resolution (depending on jurisdiction, it can almost immediately binding as soon as both parties accent to that reading) than also having waited out the statute of limitations
They don't own the stock as I understand it but never received options which they should have and would have been able to exercise. I assume they sold the remainder of the options long ago otherwise they have $3b in NVDA already and probably wouldn't have written this post.
NVIDIA’s CFO wrote me a letter stating that 15,625 shares of my stock options had vested, and that I was required to exercise them. I did, and then forgot all about it.
Read the whole thing again. They aren’t complaining about the 15,625 shares (which they presumably sold a long time ago) but the remaining 25,000–15,625.
What sort of law suit rights can be sold? This is a new concept for me. If I was hit by a Mack truck could I sell my rights to sue. It would seem to be a different type of case or are they both sort of the some. Injured by a truck vs. injured by you not holding up your end of the bargin?
You should sell your right to litigate this. There are hundreds of firms that would pay you to take this on. Would involve near zero effort for you and would also check the box of being “about the principle”.
Unless the options grant had specific language of an expiry period I would gather there's a very good chance of a large payout. I don't know why you wouldn't go after closure of this if you found yourself in the same scenario. Many legal agreements are simply a percentage of winnings and no payments otherwise. Seems pretty obvious to take that route.
Why would anyone buy that right? Statute of limitations is crystal clear here. The case is going to be dismissed the moment it gets in front of a judge.
There’s already a relatively liquid market here around legal financing, but they only finance cases that can win. This is not a case that will result in anything but a dismissal.
I am not a lawyer. If you are, then I will consider this response null and void… but if you’re not, just go to your LLM du jour and ask it why this case might have ground. If it is even 1% convincing then imagine what sort of case a real attorney could come up. Then multiply the odds of winning against a billion dollars. A >0.01% chance EV would probably catalyze at least one of these firms.
After much soul-searching, deliberation, and gnashing of teeth, my attorneys and I concluded that the statute of limitations was against us. Because of the thirty-odd years that had passed while I “sat on my rights,” it seemed unlikely we’d make it past a motion to dismiss.
If you’ve exercised them, you’ve essentially bought the stock at that price and own it. Most people just sell them right away because they’re more interested in the payment on the difference between option price and current price. But you technically could exercise/buy it and just hold.
So the dispute is basically over whether NVIDIA incorrectly prevented a guy from buying $468.75 worth of additional founder-era stock, which through NVIDIA's subsequent growth and splits became approximately $1 billion of stock thirty years later.
It seems like both you didn't caring about it during vesting or maybe they did a typo since it seems like you were vested over 4 years normally and the offer is over 4 years?
Anyway if someone did this to me this is pretty much grounds for an irreparable relationship. Though I guess it was worth the attempt for $1b.
If they did not complain when they were sent the letter (of vesting) either they did not care about the stock or was under the same assumption they were that is over 4 years.
Of course, contracts are legally binding, but that's completely different from my perception / evaluation of someone - if the mutual understanding was over 4 years and then 30 years later you find the typo and come back to bite me then yes it is 100% an irreparable relationship.
Yes I would think better of them if they came back to bite if NVIDIA was a penny stock but probably nobody would bite them back if they found out it was worth $100 instead of $1B.
To be clear, the grant is the legally binding document regardless of intent (initial offer + vesting seems to imply 4 years), I would eat the typo if it was 30 years ago and chalk it off as a learned mistake (assuming it wasn't company altering).
Litigation is expensive, and the OP knows that the statute of limitations is against them, so it'll likely turn out to be an even more expensive lesson.
Well in reality it’s not that big of a mistake because he probably would have sold these shares when he sold the first 62.5%……which I assume was not recently
I bought a cup of coffee for ~10.5 Bitcoin back in April 2011.
Where did it come from? Well, I was curious how Bitcoin worked, so I set up a little mining rig and let it run at night on my work computer. So, other than my time, which I think I did on work's time, and the power, which I think I used work's power... I saw it as a free cup of coffee.
Honestly, I was just so happy to find a booth at a convention that actually took Bitcoin that I didn't mind the crappy exchange rate.
But anyway, I don't think regret is a particularly useful thing to hold onto. You can regret things you did, and you can regret things you didn't do. Either way, there's nothing you can do about it. It feels like baggage. Hold on to too much of it and you sink. You have to find a way to rise above it and keep moving forward. If you don't, you'll drown.
I say that as someone who learned this lesson the hard way.
I spent 3+ years in a legal battle with an insurance company and their contractor that ultimately cost me more than $500,000. I was right. Period. I had been wronged. Period. The contractor and insurance company both lied and I had ample documentation of them doing so, and doing shoddy work. What I was asking for was completely reasonable. But who cares? That's not how the courts or the legal system work.
What I learned from the process was that most people just get screwed over when they go up against big companies. And it's not even close. I'd guess something like 75% of people who get into a fight with an insurance company end up losing -- and it's probably higher than that if you factor in the people who simply give up. Eventually, you have to decide whether continuing to fight is worth what it's costing you.
There will always be another "I almost caught the fish!" story to tell. Life is long. Learn from the mistakes, let go of the things you can't change, and do your best to keep moving forward.
Some situations just suck. Best not to think about it them too much.
You are ultimately responsible for asserting your contractual rights. Your stock options had an expiry and you did not exercise them in time. The letter you received notifying that you had 15,625 vested options was not an award in of itself, it was only a courtesy notifying you that you had vested options to exercise before they expired. Even if due to ambiguous wording it could be argued that 25,000 options had vested at the time instead of 15,625, that was only relevant until the options expired. You needed to assert your rights to the vested options before they expired. So, this issued died in 1996.
I had a similar experience although over a shorter time horizon. I was in a dispute with a corporation which prompted me to pore over every word in every previously signed agreement. I discovered, due to an obvious typo in a stock option agreement, more options had vested than had been intended. After some pushback, they eventually relented and awarded me the options.
Given the amount of money involved, it was worth engaging lawyers to see if NVIDIA would pay you some money to save the hassle of dealing with it, but there is and was zero prospect of this ever being awarded in your favor by a court since the options expired.
Author here. I wanted to share this piece of personal and technical history from the early days of 3D graphics. The article covers the meeting on my houseboat with Jensen, Curtis, and Chris in 1993, working on biquadratic texture mapping for the NV1, and how Microsoft’s sudden pivot to triangles in DirectX nearly broke the company before their pivot to the RIVA 128. It also digs into the paperwork anomaly I recently uncovered regarding my Technical Advisory Board options and the vesting schedule. Happy to answer any technical questions about the early 90s VR/graphics scene or the NV1 era!
The Kingdom of Tonga stood out to me. Are you still there? Why were you there? It's a very interesting place, especially for anyone not from there. I'm only adjacently aware as someone who spent most of my life in a different Polynesian country.
How bad was the motion sickness back then and what kind of hardware were people using for the headsets?
Did anything progress past tech demos?
What was your gain on the 15,625 shares you did own? What year did you sell them?
Do you still program for fun ?
I’m in a small game dev group and I very much enjoy seeing how older engineers tackle problems.
I was in on the ground floor of WiFi, in that around 1995 I did a significant chuck of the work that proved that WiFi works, and my work at a university lead to the formation of a company that put WiFi into the market (Radiata). The IP situation was murky. A patent holder made about $1b and the company sold for $560m (in 2000). I gather the university complained and got a good chunk of "go away" money. I could have thrown my hat in the ring: maybe I would have got something, maybe I wouldn't have. Either way, I walked away, as I judged it wasn't worth the non-financial cost. 30 years layer I still think I made the right decision. I might have been living in a nicer house, but I wouldn't have the life I have today, which I am happy with.
I don't know your situation in life, but if your experience is anything like mine I reckon you've probably made the right decision.
You lived on a houseboat named SS Vallejo in Sausalito...
Any chance it was THE Vallejo where Alan Watts lived, and the grateful dead once played? Or maybe she was just named in homage?
Either way, it's very cool! Thanks for the great read.
tl;dr
OP was not given all of the shares earned at the time decades ago and didn't realize that they should've been payed out, but after engaging in a lawsuit realized that the court would likely not grant the case give the statute of limitations.
Kinda like all the Sony game 'owners' not carefully reasing the legally binding contracts they're always signing realizing that they are not in fact purchasing a gauranteed lifetime access to the game.
Correction: The writer chose not to engage a lawsuit after receiving advice it was likely to be dismissed given 30 years had passed.
I think that's an overly charitable reading.
Whether they "earned" them is disputable — the offer letter specifies one vesting schedule (25% every year), the "cover sheet" from the options agreement specifies other (25% every _quarter_).
So — the OP got the shares he was promised in the original offer letter; but later discovered that some of the documents he later got implied that the vesting schedule should be accelerated compared to what he agreed to.
I think that is probably the funniest way possible to earn a billion dollars; but whether he's "owed" that money/shares, is... up for a debate.
Why does a stockholder have to reassert their rights to hold the stock that they already own?
Plethora of reasons, but right to title is not as black and white as anyone assumes. There is no govt ledger that keeps track of who owns what, everything is always subject to interpretation. If you own a home, you likely had to purchase title insurance. If you don’t know what that’s for, look it up. It will give you the same answer to this question.
Also seems like it isn’t clear that they ever owned it. There appears to be a mistake in the contract asserting mutually inconsistent clauses, but it appears that both parties agreed on the not-owning interpretation for nearly 30 years, which might already be a far simpler contract resolution (depending on jurisdiction, it can almost immediately binding as soon as both parties accent to that reading) than also having waited out the statute of limitations
They don't own the stock as I understand it but never received options which they should have and would have been able to exercise. I assume they sold the remainder of the options long ago otherwise they have $3b in NVDA already and probably wouldn't have written this post.
They do not own the stock, because the options never vested and thus were never exercised. The time to assert that claim was 30 years ago.
Those shares were fine, it was the other 9,375 that were in question here.
Read the whole thing again. They aren’t complaining about the 15,625 shares (which they presumably sold a long time ago) but the remaining 25,000–15,625.
Seems like you should sell your rights to the suit to a third party for a flat fee and percentage of recovery.
Just commented the same thing and agree 100%.
What sort of law suit rights can be sold? This is a new concept for me. If I was hit by a Mack truck could I sell my rights to sue. It would seem to be a different type of case or are they both sort of the some. Injured by a truck vs. injured by you not holding up your end of the bargin?
Pretty much any lawsuit right can be sold, except for personal injury lawsuits, due to specific state restrictions for public policy reasons.
You should sell your right to litigate this. There are hundreds of firms that would pay you to take this on. Would involve near zero effort for you and would also check the box of being “about the principle”.
Would they? Surely they'd realize that they too have no chance of winning because of the same issue.
Unless the options grant had specific language of an expiry period I would gather there's a very good chance of a large payout. I don't know why you wouldn't go after closure of this if you found yourself in the same scenario. Many legal agreements are simply a percentage of winnings and no payments otherwise. Seems pretty obvious to take that route.
Why would anyone buy that right? Statute of limitations is crystal clear here. The case is going to be dismissed the moment it gets in front of a judge.
Out of curiosity, why do you think you know that?
There’s already a relatively liquid market here around legal financing, but they only finance cases that can win. This is not a case that will result in anything but a dismissal.
I am not a lawyer. If you are, then I will consider this response null and void… but if you’re not, just go to your LLM du jour and ask it why this case might have ground. If it is even 1% convincing then imagine what sort of case a real attorney could come up. Then multiply the odds of winning against a billion dollars. A >0.01% chance EV would probably catalyze at least one of these firms.
Absolutely this.
That was my first thought as well.
So the shares he did receive are worth well over $1B too right?
Probably sold them a long time ago.
this is like finding your harddrive with 13,000 bitcoin but it's encrypted and you forgot the password
Don’t options expire (ex. Leaving the company)? How would this work thirty years later?
If you exercise them, they are yours.
He didnt though. He only exercised 3/4 of them and it sounds like he sold those shares
If you’ve exercised them, you’ve essentially bought the stock at that price and own it. Most people just sell them right away because they’re more interested in the payment on the difference between option price and current price. But you technically could exercise/buy it and just hold.
9,375 × $0.05 = $468.75.
So the dispute is basically over whether NVIDIA incorrectly prevented a guy from buying $468.75 worth of additional founder-era stock, which through NVIDIA's subsequent growth and splits became approximately $1 billion of stock thirty years later.
[delayed]
Not sure how to feel about it.
It seems like both you didn't caring about it during vesting or maybe they did a typo since it seems like you were vested over 4 years normally and the offer is over 4 years?
Anyway if someone did this to me this is pretty much grounds for an irreparable relationship. Though I guess it was worth the attempt for $1b.
If someone tried to claim what was contractually theirs?
If they did not complain when they were sent the letter (of vesting) either they did not care about the stock or was under the same assumption they were that is over 4 years.
Of course, contracts are legally binding, but that's completely different from my perception / evaluation of someone - if the mutual understanding was over 4 years and then 30 years later you find the typo and come back to bite me then yes it is 100% an irreparable relationship.
Yes I would think better of them if they came back to bite if NVIDIA was a penny stock but probably nobody would bite them back if they found out it was worth $100 instead of $1B.
To be clear, the grant is the legally binding document regardless of intent (initial offer + vesting seems to imply 4 years), I would eat the typo if it was 30 years ago and chalk it off as a learned mistake (assuming it wasn't company altering).
To satisfy the curious, "I have been everything, and nothing is worth it."
Well quoted.
Thanks!
Way of my league here but if it starts with a B and they said sue them, why not go ahead and sue them?
You’re not the only one who want to see this go somewhere.
Litigation is expensive, and the OP knows that the statute of limitations is against them, so it'll likely turn out to be an even more expensive lesson.
Big mistake.
These matters are not purely legal nor purely right and wrong.
They are personal and political too.
This is a fight you should have fought.
Well in reality it’s not that big of a mistake because he probably would have sold these shares when he sold the first 62.5%……which I assume was not recently
Boo hoo, you are so rich that you forgot about a billion dollars worth of stock and I'm supposed to pity you?
I bought a cup of coffee for ~10.5 Bitcoin back in April 2011.
Where did it come from? Well, I was curious how Bitcoin worked, so I set up a little mining rig and let it run at night on my work computer. So, other than my time, which I think I did on work's time, and the power, which I think I used work's power... I saw it as a free cup of coffee.
Honestly, I was just so happy to find a booth at a convention that actually took Bitcoin that I didn't mind the crappy exchange rate.
But anyway, I don't think regret is a particularly useful thing to hold onto. You can regret things you did, and you can regret things you didn't do. Either way, there's nothing you can do about it. It feels like baggage. Hold on to too much of it and you sink. You have to find a way to rise above it and keep moving forward. If you don't, you'll drown.
I say that as someone who learned this lesson the hard way.
I spent 3+ years in a legal battle with an insurance company and their contractor that ultimately cost me more than $500,000. I was right. Period. I had been wronged. Period. The contractor and insurance company both lied and I had ample documentation of them doing so, and doing shoddy work. What I was asking for was completely reasonable. But who cares? That's not how the courts or the legal system work.
What I learned from the process was that most people just get screwed over when they go up against big companies. And it's not even close. I'd guess something like 75% of people who get into a fight with an insurance company end up losing -- and it's probably higher than that if you factor in the people who simply give up. Eventually, you have to decide whether continuing to fight is worth what it's costing you.
There will always be another "I almost caught the fish!" story to tell. Life is long. Learn from the mistakes, let go of the things you can't change, and do your best to keep moving forward.
Some situations just suck. Best not to think about it them too much.
You are ultimately responsible for asserting your contractual rights. Your stock options had an expiry and you did not exercise them in time. The letter you received notifying that you had 15,625 vested options was not an award in of itself, it was only a courtesy notifying you that you had vested options to exercise before they expired. Even if due to ambiguous wording it could be argued that 25,000 options had vested at the time instead of 15,625, that was only relevant until the options expired. You needed to assert your rights to the vested options before they expired. So, this issued died in 1996.
I had a similar experience although over a shorter time horizon. I was in a dispute with a corporation which prompted me to pore over every word in every previously signed agreement. I discovered, due to an obvious typo in a stock option agreement, more options had vested than had been intended. After some pushback, they eventually relented and awarded me the options.
Given the amount of money involved, it was worth engaging lawyers to see if NVIDIA would pay you some money to save the hassle of dealing with it, but there is and was zero prospect of this ever being awarded in your favor by a court since the options expired.
The article states that they exercised their options.