Nadav Shoval on Founder Duty, Whistleblowers, and Weaponized Venture Capital
Author(s): Scott Douglas Jacobsen
Publication (Outlet/Website): The Good Men Project
Publication Date (yyyy/mm/dd): 2025/12/12
Nadav Shoval is an Israeli entrepreneur and technology founder known for his deep commitment to ethical innovation and mission-driven leadership. With a background in building companies that scale globally, he emphasizes responsible governance, strong founder-investor alignment, and safeguarding technology from misuse—especially in ventures that receive government funding or involve sensitive applications. Shoval advises founders navigating complex conflicts with boards or investors, drawing on his own experience across high-pressure growth environments. His perspective on values-based decision-making and contractual accountability has made him a respected voice in debates surrounding founder rights, venture capital dynamics, and the long-term societal impact of emerging technologies.
Scott Douglas Jacobsen speaks with Shoval about the wider stakes of Dr. Stafford Sheehan’s whistleblower case against Air Company. Shoval argues that export-control and IP concerns expose a recurring pattern: sophisticated investors and foreign actors using venture capital structures to access sensitive U.S. technology. He outlines how founders often underestimate structural power imbalances with VCs, from board control and forced exits to legal warfare funded by “unlimited” capital. Shoval urges technical founders to recruit seasoned commercial partners, rigorously diligence investors, and treat values-driven governance as a core defence, not an optional ideal.
Scott Douglas Jacobsen: From your vantage point, what makes Dr. Stafford Sheehan’s whistleblower case significant, specifically beyond the dispute between him and Air Company?
Nadav Shoval: The background of the case and the way Air Company’s technology has allegedly been handled—especially the national security and export-control issues raised in Dr. Sheehan’s complaint—points to a larger pattern we see. Certain foreign actors, including Chinese entities, are increasingly focused on acquiring sensitive U.S. intellectual property. In this situation, the allegations involve sensitive engineering data and defence-related technology, not just a private commercial dispute. That is what makes this case very unique.
Jacobsen: So how should founders think about contractual obligations when public or government funds are involved?
Shoval: As a founder, your goal is to create significant value, build a strong company, and develop important technology. Some companies hold intellectual property that is highly strategic for the country. Founders strive to bring in strong, supportive investors, but many are not aware of the agendas those investors may have. Does it make sense?
Jacobsen: With your experience on OpenWeb’s board of investors, what structural—rather than individual—vulnerabilities do founders overlook when they sign early documents?
Shoval: The main thing founders do not fully grasp is that the company is not theirs indefinitely; it eventually becomes subject to the investors’ priorities. We assume that the more value we create, the more aligned everyone will remain. However, if you raise too much money or bring in too many investors, you may find that they have interests that conflict with those of the company, even when the company is growing and successful. Some investors may need liquidity after seven years, or their limited partners may be applying pressure for unrelated reasons. By design, most venture capital funds are not fully aligned with founders. Most founders do not realize this.
Jacobsen: I appreciate that point. A founder, as you noted, is ultimately accountable to the board—and to the shareholders as well. So, regarding corrective mechanisms, feedback, and governance, what is considered normal, and what is considered abnormal or inappropriate in terms of discipline?
Shoval: When you see that some shareholders are acting against the best interests of the rest of the shareholders—whether they are board members or not—there is a problem. This happens more often with venture capital investors than with angels. When a structured financial institution invests in early-stage startups, and you see a shareholder beginning to act, vote, or apply pressure around decisions such as selling the company, choosing a buyer, arranging financing, or selecting strategic partners—I have seen all of it—that should trigger an alarm. There is likely an agenda behind it. It is hard to notice because many investors are sophisticated. Legally and financially, they understand the articles of association and incorporation documents better than the founders do. They surround themselves with teams of lawyers and know how to maneuver a founder, both emotionally and commercially.
Jacobsen: What kinds of protections would you like to see for technical co-founders or early scientists?
Shoval: Find a commercial co-founder. That is my main advice—someone who understands these dynamics. Do not swim in the ocean with sharks when all you have is your IP. It is a bad idea. You need someone who has been in the tank with those sharks and knows how they talk, their manipulations, and their games. There are many practical issues—small terms in the articles of association that founders do not understand, such as voting mechanisms, distributions, and more. I will not get into the legal details, but my best advice is this: Y Combinator is right that every startup needs two personas. One is the person who can build the product from A to Z. The other is someone experienced on the commercial side—someone who has worked with VCs and shareholders and understands the game because it is a complete game.
Jacobsen: We are focusing on protections and avoiding harm. Business is not for the weak. At the same time, is it generally a safe endeavour if people take appropriate precautions?
Shoval: No. Startups are against all odds. By definition, you are up against large companies and even governments. You are competing for the right to exist. It is very high risk, especially once you take institutional money. VC firms, private equity firms, and family offices—though family offices sometimes less so—operate on structured capital. They are in the business of making money, not building companies. They create companies only when it serves that goal.
Jacobsen: Do you see whistleblower actions like Dr. Sheehan’s as primarily legal mechanisms?
Shoval: I see it differently. Promising founders usually do not work only for money. They work for a purpose. It is about doing what is right—an internal compass of values. Dr. Sheehan acted in the interest of the client, which in this case is the government, and in the interest of the shareholders. If I were in his position, I might have done the same. You fight to ensure technology is used for the right purposes. If it is misused by a foreign country with conflicting policies or interests, that is morally wrong. Many founders want to fight for what is right. That is part of what makes them founders—something in them that pushes them to defend the right course of action.
Jacobsen: Let us say a founder and a board enter a conflict, and it moves to court or arbitration. What tend to be the significant asymmetries in those situations?
Shoval: The capital that venture firms can deploy. An individual founder ends up fighting alone against a large institution with significant financial resources. They hire the best legal teams, drag out the process, and can be very aggressive. It is tough to go against them because they have effectively unlimited money.
Jacobsen: Are founders typically emotionally sturdy enough for this kind of situation? Meaning, by analogy, people going through a divorce—one party may be more emotionally resilient than the other.
Shoval: Founders are far more emotionally invested than VCs. For VCs, companies are portfolio assets.
Jacobsen: What should be in contracts or safeguards?
Shoval: The most important thing is to speak with other founders in the investor’s portfolio—especially the ones who failed or had problems. Do not rely on success stories. Speak with the founders who encountered difficulties and ask about the individuals involved.
Jacobsen: When there is that much money circulating, how large is the gap between what is legal and what is moral?
Shoval: It is hard to generalize, and perhaps this reflects my personality more than others, but many founders are mission-driven. They will push boundaries when needed. In technology, especially, people tend to have strong views. Most of the founders I work with—the successful ones—are highly moral and deeply driven by their values. That is why they want to do things their own way. That has been my experience.
Jacobsen: What do you struggle with most in this area of human life? What is the most emotionally taxing?
Shoval: Surrounding yourself with people more intelligent than you. For me, it is about building a great team of top performers who can work well together. The hardest part is making the machine function. For me, it is always about the people—that is, both the hardest and the most crucial element.
Jacobsen: Are there certain people who do not seem to feel anything? They can withstand whatever is thrown at them. It is not that they lack empathy, but their affect is so muted that nothing flusters them. It is a strength because they stay calm, but a weakness because they are not tuned in to the social moment.
Shoval: Yes, I suppose so. I am sorry, but I have to run. My apologies.
Jacobsen: All right. No worries at all. This was very helpful. I appreciate your time.
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