New Windsurf CEO Jeff Wang recounts a frantic weekend of dealmaking to save the startup: 'I was on the verge of tears'
The recent deal between AI startup Windsurf and Cognition, which took place over a single weekend sprint, was no exception.
To sum it up: The industry's most successful AI startup, OpenAI, was initially set to acquire Windsurf, which makes an AI coding assistant, in a $3 billion deal. But the deal fell through, and Google swooped in to hire away its CEO and some of its top executives.
That left the company's remaining executives scrambling to figure out what to do next and to break the news to the company's 250 employees, who were anticipating a windfall from the OpenAI deal.
"It was my job to explain to the company our path forward," Windsurf's new CEO, Jeff Wang, wrote in a post on X. Wang was formerly the company's head of business. He had planned to discuss the options — fundraising from VCs, selling the company to someone else, distributing remaining cash, or just keeping it going.
"The mood was very bleak," Wang wrote. "Some people were upset about financial outcomes or colleagues leaving, while others were worried about the future. A few were in tears."
Later that day, a ray of light emerged. Wang said Cognition cofounder Scott Wu, and its president, Russell Kaplan, reached out. They wanted what was left of Windsurf.
Cognition makes the AI coding agent Devin, which it calls "the first AI software engineer." It is valued at $4 billion, coming off a $120 million funding round in March, according to PitchBook.
Wang saw the melding of the company's products as a potential win-win.
"Devin would benefit from a foreground synchronous agent, while we needed a remote asynchronous agent," he wrote. Added to that, he was excited about both companies sharing talent.
The dealmaking kicked off immediately. They brought in lawyers and spent all weekend hashing it out.
In just over 24 hours, they had signed a letter of intent, the first step. A key part of the deal was prioritizing Windsurf employees — ensuring payouts, waiving cliffs, and accelerating equity vesting, Wang said.
Lawyers pored over the deal all day Sunday, and by Monday morning, it was finalized. One lawyer called the deal "one of the fastest" they had ever seen, Wang wrote.
When the deal was at last announced to Windsurf's employees Monday morning, Wang said they celebrated.
"The applause from our people seemed to last forever, and I was on the verge of tears myself," Wang said.
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