An ownership dispute over Cruise, a hot autonomous driving startup that General Motors is acquiring for $1 billion, took a new turn on Thursday when a man who claims to be a co-founder filed court papers saying he was given a 50% stake at the company’s inception.
Jeremy Guillory, the alleged co-founder, said in his filing that he played a critical role at Cruise and that he was not just an early and brief collaborator. He countered the argument of the current CEO, Kyle Vogt, who filed an earlier complaint that said Guillory played little to no role in developing Cruise’s technology, which adds autonomous driving to a regular car, before parting ways.
From Guillory’s filing:
Guillory and Vogt agreed in writing to pursue Guillory’s Auto Cruise approach through ‘Cruise Automation,’ an entity that Vogt had incorporated a few weeks earlier, which Vogt and Guillory agreed to split “50/50” as co-founders. Guillory would perfect the Auto Cruise auto-pilot system, and Vogt would provide seed money, organize the company, and handle fundraising.
Guillory’s experience and expertise in self-driving car technology was vastly greater than Vogt’s, which is one of the primary reasons why Vogt agreed that Guillory should be a co-founder and 50% equity owner of Cruise. Cruise and Vogt had no business plan, product concept, intellectual property, or other assets until Guillory, in reliance on the parties’ 50/50 agreement, contributed all of his knowledge, skill, intellectual property, know-how, and business information to Cruise and began technology development.
The pair went on to apply to Y Combinator, a prestigious accelerator program for startups, but split up just before an interview with the program’s partners. Guillory did however record the application video with Vogt and was listed as a co-founder on the original application paperwork.
The Y Combinator application, which Fortune obtained, states that Cruise’s ownership is a “50/50 split between Kyle and Jeremy.”
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Guillory also disputes how they parted ways. While Vogt claims they mutually agreed to end their business ties because their personalities and visions didn’t match, Guillory says “it was a unilateral decision by Vogt to terminate Guillory as lead technologist.”
The complaint also claims that after GM’s announcement last month that it would acquire Cruise for a reported $1 billion, Guillory contacted Vogt to ask about his share of the payout. Although he denied that Guillory was due anything, Vogt offered to pay him $1,000,000 before increasing the amount to $1.5 million. Vogt also offered to acknowledge that Guillory was a co-founder under the condition that Guillory surrender his ownership rights. Guillory also says he was pressured by Cruise investors to comply, under the threat that his reputation would be ruined if he didn’t. Guillory didn’t accept the deal by last Friday’s deadline, which he says was not enough time for him to get an attorney and properly assess the situation.
News of the dispute first surfaced on Wednesday when Y Combinator president and investor Sam Altman published a blog post detailing the situation along with the complaint filed in court by Vogt.
Cruise is far from the first startup to be embroiled in an ownership dispute. Others have included Facebook, Snapchat, and Yik Yak.