One of our founders left with 5% equity vested -- fundraising red flag?

[cwilstop]

We're looking to fundraise and don't want this to be a red flag, but we don't want to screw him over. Suggestions?

The team is fine with his current equity position, but this could look bad to investors. He also put in $10k to support company costs and a year of work. He's a good guy, but there wasn't a full-time role for him any more. Is there a way to leave him with a solid stake while not raising concerns when fundraising? Thanks all.

[jdg]

It's dead equity and at some point in most every companies life, it happens.

I wouldn't worry about it too much.

[PythonDeveloper]

Unless he has a non-dilution clause. If he does, it will likely become a very sticky issue with VCs.

[cwilstop]

there's no non-dilution clause. it's more that this never would have gotten off the ground without him, so we'd rather not knock him low.