[NonIdentifiable]

It is fairly small (sub $1000), but large compared to our income over the past 6 months. We are trying to slowly grow, gain more capital to do more ambitious projects without involving VC's in an attempt to keep the corporation for us. I think the anger issue is definitely something that is getting to me, AND the other founders.

We are definitely trying to cancel the corporate card, however Wells Fargo is giving us the run-around.

The other founders are unhappy with the situation and are on new territory as well, so we are all unsure as to how to proceed. No, we are all pretty much together that something has to be done, we cut him slack when we noticed it and talked to him about it, now it has become an issue of how is the corporation to survive if frivolous spending becomes the norm?

Am I overreacting, possibly, but if that is the case we (as in the other founders) are all over-reacting.

Yes, we are trying to get the issue resolved as soon as possible, however I know HN is an extremely smart group of individuals and advice is always wanted from people that may have gone through something like this before.

[mcknz]

You're not overreacting -- this could turn into something more serious. Some people you find aren't really your friends until it's too late. Though I agree you probably don't want to get the police involved, and I'm not sure there would be anything they could do since it's probably a civil matter.

random ideas:

-- get a new card account, then use up available credit on the old card with a cash advance or some other reversable transaction. -- report the card as lost. -- send him a letter/email explaining (nicely) that he has until X date to repay the money or you will go to small claims court. There you wouldn't need a lawyer -- you'd only have to pay a filing fee, and a judgement in your favor could affect his credit rating, and give you a tool to force repayment.

[hga]

Agreed that you're not overreacting.

Seriously, this guy has shown himself to be fundamentally dishonest (both for starting this behavior after the rules of the game have been well established over a couple of years and then by neither stopping his theft or repaying as he promised). You're just not going to make things work with this guy and it's a lot broader than him taking money from the company that can't afford it, he's demonstrated that you can't trust him at all.

As philiphodgen says, either you remove him from the company (and don't delay) or you remove yourselves from it and let it die. You've given him the one chance he deserves, now is not the time for half-measures, including any compromise that includes him continuing to work with you in any way.

My father once worked at a very high level for a company where one of the founding partners started helping himself to anything he took a fancy to. The company was very profitable so it's not quite the same thing; getting rid of this partner was intensely painful and expensive (e.g. his demands for immediate cash when it came time for investment limited the options and caused everyone to take a needlessly big tax hit).

One lesson from the above is that if you do become successful the pain and difficulty is only going to be greater. If you were making 10/100/1000 times as much money how much might he be helping himself to? He feels entitled to the money....