Unveiling the Unsettling Windsurf Google Deal: VC Payouts and Employee Compensation Controversies

Key Points

1. Google paid $2.4 billion to Windsurf, with $1.2 billion allocated to investors and $1.2 billion for compensation packages for about 40 employees, including co-founders Varun Mohan and Douglas Chen.

2. Venture capital firms like Greenoaks, Kleiner Perkins, and General Catalyst saw significant returns, with Windsurf having raised $243 million and valued at $1.25 billion in 2024.

3. The deal left many Windsurf employees with minimal financial gains, causing discontent and debate over fairness in high-stakes tech acquisitions.

4. Google's acquisition strategy focused on acquiring critical IP and human capital without fully absorbing the company, differing from traditional stock acquisitions.

5. The deal followed a prior $3 billion acquisition offer from OpenAI and later saw Windsurf's remaining assets sold to Cognition for around $250 million, benefiting remaining employees.