Denis Grosz, a Silicon Valley investor, invested in Toptal, a startup launched by CEO Taso Du Val in 2010, which connects skilled software developers with companies. Initially, Toptal thrived, securing $1 million in funding from Grosz in 2012, contingent on future capital raises converting the loan into equity. However, Toptal never raised further funds, leaving Du Val in full control and Grosz without an ownership stake. In court, Grosz claimed Du Val assured him the loan would convert into equity, leading to a lawsuit in 2021 after Grosz allegedly attempted to undermine Toptal by establishing a competing company, Cavalry, and discrediting Toptal through media manipulation.
The court ruled against Grosz, awarding Du Val $15 million in punitive damages for his interference. The judge later reduced punitive damages to $1.6 million, citing a disparity between punitive and compensatory damages. Toptal is also pursuing a lawsuit against the competitor Andela for allegedly poaching employees and misusing trade secrets. The legal battles continue, reflecting the complexities and drama often inherent in Silicon Valley’s startup ecosystem.
