[BobbyH]

It sounds like you and the CEO both want something, which is often the basis for a reasonable compromise. You want to be let out of the strict non-compete clause, and you want your back-pay and ideally a raise. Meanwhile, the CEO doesn't want his company to fall apart in the wake of your departure. You could approach your CEO, and ask him to deliver a plan to pay down your backpay. During that discussion, you can tell him that since you're underpaid and haven't gotten a raise for years, you'd like to amend your employment contract so that the non-compete and invention clauses only apply to your corporate work (and not your consulting work). You can explain that this would let you do projects on the weekend that would help you make some more money to compensate for the undermarket salary.

Not tying the reason to your desire to be able to get another job easily also helps the CEO from freaking out as much. Also, limiting the non-compete edits to the consulting work helps him feel that his corporate work isn't threatened, while getting you what you want.

Amending your non-compete would also give you flexibility if you choose to leave, so that would be my primary goal here. To increase your leverage, you can also ask for a raise. Assuming he says that giving you more money is impossible, that increases pressure on him to concede on the only term that is non-monetary.

[throwawayAug16]

Thank you for the advice. I have tried similar in the past, but I have stopped shy of putting him in a corner.

I have gotten him to agree to let me work on side projects in exchange for the company getting 20%. But I found the hours I need to put into my main job are so long that there is no time left for the side projects (unless I neglect my wife, daughter, and/or my health) so it's an empty promise.

And obviously I can't contract on the side. That would be direct competition.

[BobbyH]

Taking a step back, it seems like you want to present a perfect solution to your boss that he can just adopt. I mean this in a friendly way, but that's not your job. Your job is to tell your boss what you want. Your boss's job is to figure out how to meet your needs.

Along those lines, I would just tell him politely that you'd like a plan to get your backpay over time, you'd like a raise although you understand that funding may preclude that, and you'd like your non-compete to be altered so at least it doesn't apply to your consulting work, since the scope of the consulting work is so broad that you wouldn't be able to ever get another job. You can mention that given the natural instability of a startup, this fact is stressing you out and making you lose sleep.

I would also ask to "paper" the backpay, so you have more than a verbal commitment on that.

If you talk nicely and respectfully about these issues, it is very likely that he will agree to the one term that doesn't cost him any money. (He will likely stall on all the other terms.)