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Your question and many of the comments so far tend to focus on the CTO. I'd like to focus on your co-founder, the "CEO".

If he wanted to start with a less-experienced technical person, and jettison them early on -- he could have hired an employee and paid them.

Instead he co-founded with you, as a partner. He was happy to take your money -- you have skin in the game. He doesn't get to shoo you out the door now like a temp.

He also doesn't get to do it via the CTO. He owes you a frank conversation. Also you need a lawyer.

tl;dr: From hearing your side of the story, although the CTO is handling this like a tool, the CEO is the biggest schmuck.

I agree with this point. The CEO does just what he was told to. I assume he's just an employee without ownership, and employees don't fire owners unless someone much stronger is behind them.

Definitely lawyer up, that would be a first thing. Then, if you want to regain control about he company, consider CEO your enemy, not the CTO. Invent a reason and fire the CTO, if you can do it. Then, step up as CTO yourself, or at least hire a person you trust. Then, hire COO, CFO, CMO. Make sure those are people that are loyal to you and where each one will take over one of the CEO responsibilities. At the latest stage, let those people document every mistake of CEO, and you try to push him out together with C team and investors.

That's exactly what he is doing to you. He convinced you to voluntarily step out from CTO position and hired his tool. Now, your chances to fight back are much worse from this position, but the war is not yet over.

So, lawyer up, read Machiavelli, know your enemy and fight fire with fire. Remember, the CEO that did this to you is not your friend anymore, and deserves whatever you do to him.

Personally, i consider this bad advice. Fighting is never really a good thing. SO please don't start a civil war, all it will do is destroy the company. The whole vengeance thing is very counter productive. I'd say lawyer up to get compensation and not to take revenge. And then leave and find a place where you are more appreciated. perhaps focus your energies on something new , something productive

It depends. Is company worth fighting for? What would be your share if you keep your part of the slice? If that is bigger than compensation you would get, than it certainly is worth fighting for. It's not about vengeance, it's about founders own interests, even if that would make company worse off.

45% share of 100M$ worth company is still much more than 10% share of 200M$ worth company or 1M$ compensation. You are not fighting to optimize for the company success, you are fighting to optimize your own wealth. If the company gets destroyed, and you still manage to get more then what would be your compensation package, you are still better off then retreating. Why caring about the company that doesn't benefit you, you would certainly not enjoy the success of the company that squeezed you out.

So yes, lawyer up and fight if it's worth to you to fight for the control. Don't be emotional about he company and business. It's your weakness, and they are already playing on that.

Well as someone here pointed out, the whole fighting thing is toxic. It even marks YOU for the rest of your career. You can't just go to everyone and say "he started it!". outsiders would see BOTH of you as dangerous, and would likely avoid working with you. So it's more of a suicide mission really

> I invested all my personal wealth.

I think this is being overlooked. You invested all your personal wealth into this company and in return you got unvested shares?

This right here. The money OP invested -- whether hard cash, or equivalent deferred pay or both -- should have resulted in direct, fully vested stock, just as it does for angels and VC's. (to clarify: it should vest at the rate that the work is performed, not over some arbitrary schedule).

There's this underlying meme in our community that "elbow grease" investment -- working for low pay, no benefits, rejecting other career opportunities -- is somehow worth less than an investor's cash. IMSHO, it's just the opposite -- cash typically doesn't draw down one's pool of emotional well-being and spirit the way hard work does. Work investment should be rewarded with a premium, not treated as somehow less than just money.

What I don't get; shouldn't it already have vested if he is a founder? I'm not sure about the system there but when I found a company those shares are mine?

The advice has been given several times, on HN, that founders should vest, so that you don't need to claw back 1/3 the company from a founder who walks away a month in.

This is sane advice if you're playing the standard VC game where you shop around for a co-founder, raise funds, and build a product (not necessarily in that order).

OP's situation sounds more like a bootstrapped small business where he invested his life savings and blood/sweat/tears. I'm not sure that vesting shares is ideal there -- perhaps a well defined shotgun clause or similar is more reasonable to handle unruly founders.

If you can come to some agreement with the CEO/CTO, it's possible to accelerate a portion of your vesting for your departure. Or, since you said they want to wait until the company raises funding, you could negotiate some other kind of severance.

Either way, if possible, figure out a compromise which feels fair for everybody involved. This doesn't need to be completely one-sided.

This.

Being asked to "leave in 3-6 months" is the new CTO's opening gambit in the negotiation you're about to start.

Your _worst_ negotiating option will be to say "OK, bye".

Work out what you want.

Work out your best idea of what the CTO/company wants (depending on what you want, the first step here is most likely to be asking them outright - if what you want most is to get rid of this CTO, this step will need to be approached much more subtly and delicately, and probably with someone much more experience helping you out).

Work out some "next best alternatives" to your optimal outcome, and what you'd accept as compensation for agreeing to those non-optimal alternatives.

Mostly though - work out what _you_ want - and why, and once you've done that, look at it with the most objective view you can and determine if it's actually plausible and realistic. (To be honest, a guy who wasn't even writing tests a few months ago _isn't_ going to be the technical lead or chief architect of an enterprise software startup - at least not a startup with a high chance of succeeding or getting serious funding. Be realistic here.)

If it's just the vesting(/money) - you'll negotiate one way. It's it's actually an ego/ownership/founderdhip issue for you, then acknowledge that (at least to yourself) and work out how to negotiate your desired outcome while keeping that perspective firmly in mind (and seriously, think about whether you need to rethink that - if it's mostly an ego thing).

For what reason would the OP need to negotiate with the CTO?

You need to sit down in a room with the CEO and CTO, and have the CTO describe his concerns and then you can all resolve the issue together. For the sake of the culture of the company you can not let this slide as back-room talk, as that would create a poisonous culture. When that is answered talk to a lawyer before signing any papers, and remember that the companys lawyers are obligated to protect the company and not your interests so really get your own laywer.

I don't know exact your situation but I saw similar case. In summary, the founder who showed support to company without ego made company successful, not the CTO or VP engineering who joined later stage. That’s your baby, but to CTO, that’s neighbor’s. You are happily clean up your baby’s diaper or mess, while neighbor will blame you and not clean up. If you need process to get enterprise ready, you can hire process guy and experienced enterprise software guy and adjust your team. I think when CTO say it to you, he have talked CEO already. In that case, if CEO is mature, CEO should stop CTO blame you and discuss that matter with you first. If you are not sure about CEO’s intention, you should talk him and understand about it. In this case, I feel that CTO have hired couple of his guys and they are all point same direction. But don’t be afraid those and think whether you still can help company or not. (I think you still can help company) you should talk to CEO and let him know that company need you for technical evangelist or customer meetings or … and at last as back up to CTO. (For me, It seams CTO is a type of guy who build castle inside house, which will cause problem soon within organization.) By the way, you should consult with the lawyer if possible, and understand what you can get worst case.

You can simply tell him that you'll leave if you get the rest of your vested stock, of if you get a new position as an "advisor" that allows you to stay on at a low salary until your stocks have finished vesting. If he really wants you out he'll find a way to make it happen, and if that way is writing a check instead of dealing with a bunch of drama he'll probably take it.

> it is in my interest however to remain in the company because my equity is vested

This is negotiable. But you shouldn't necessarily be the one to negotiate it, so you should probably start talking to your own lawyer (not the company's).

> apart from my time, and opportunity cost I invested all my personal wealth.

You can try to negotiate a settlement (still consult a personal lawyer) of retaining some of your money put in (maybe after they receive investment) as well as an additional accelerated vesting of a small part of your remaining unvested shares. You still have some rights to make a big stink about all of this, but I wouldn't advise trying to stay on. You may end up with nothing and have burnt some bridges with the CEO and future investors.

Is he/she an employee or a third partner?

The questions you want to be asking are to a lawyer regarding corporate law given your current situation. (Talk to your own lawyer, not the company lawyer who represents the company and not your interests as a shareholder)

I would work on retaining control of the company and your shares, possibly isolating the CTO in terms of power, if not outright dismissal.

The CTO is way out of line speaking to a board member, and majority shareholder like that. I assume you are a director and hold ~50% of the company in addition to a few of the officer positions in the company. Utilize corporate law to eliminate risk to your portfolio.

The tech shit is completely irrelevant, you should be discussing with the other shareholders how out of line the CTO is and your contingency plan for dealing with officers who are not respectful of the owners of the company.

Also check whether the company owes you any debt, if the other founder can't come up with the money you could also use debt to take control. Again, talk to a lawyer, and keep in mind that it doesn't matter if the company tanks if you're not going to be part of any success it has. Scorched earth the mother fucker if no one wants to play ball. (Shareholder and board meetings can be a great way to get internal feuds into the corporate minute book)

Do you think anyone at Facebook cares that Mark Zuckerberg is not their top coder? (And even if he was do you think that the best value he could provide to the company would be from writing code?)

Stay for the 3-6 months, until you get your stake sorted, then get out in time before the shit hits the fan. Don't bother trying to reconcile relationships, don't get involved in the politics. It's a shame it's turned out this way, but by the sounds of it, it's not worth it. gone sour. There'll be another opportunity elsewhere for sure.