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Comment by isatty | Hacker News Reader

I am not a founder but this does not seem like sound advice. In a month, that 3% pittance becomes 10%. Also, it does not seem that the company has no value at all, if it is primed to make money. The extrinsic value on the 40% is worth negotiating over and not giving it up and walking away. Nobody should do that unless there is gross misconduct or negligence involved.

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I’m spitballing here but maybe a middle ground is to convert some percentage of shares to equivalent to the seed investor shares. Assume, for the sake of argument, he was at one year and due 10%. Convert those share to the same terms as the seed investors.

No cash upfront, equity is somewhat preserved and the rest becomes a source of potentially passive income.

Note. He has to leave. The situation is now untenable.

> He has to leave.

Depending on how the investor looks at this that is not a run race, it may very well be the investor that sides with the OP and together they may be able to kick out the aggressor.

Unless his agreement has anti-dilution, or a favorable termination clause, the Technical founder owns nothing. The investor & founder can fire him/her, then dilute their vested shares to 3%, 1%, or even less.

Meanwhile, at most the company can generate $5K a month in revenues. That’s not a business, that’s a part time job with a partner you cannot trust.

Potential worth != real money in the bank.

Also, seen from the other side: They made a contract offering 40% in four years (conditionally) - most importantly only relevant when the company/idea survive that long and are thus profitable/worth something. Why should they suddenly pay this (or a meaningful fraction?) out after one year? Or give an "outsider" 40%, which will most certainly be difficult to explain to future investors?

a standard vesting schedules is 4 years with a one year cliff. That means that after one year the person will have vested options worth 10% of the company. they will then accrue more options every month until they've fully vested their 40%.

That doesn't mean they'll only get 40% after 4 years.

And typically when you are terminated without cause a good vesting contract will foresee in that and trigger the 'accelerated vesting' portion of the contract. Ditto with an early sale and possibly other trigger conditions.

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