[wtvanhest]

The problem is the "size" as in number of participants, in the Cap table rather than what people are getting paid in the event of an exit.

All else equal, you want less people on your cap table for each round. Big cap tables increase complexity.

I wouldn't be suprised if the current CEO were to pay them on the backend regardless of his dance.

[edit] I shouldn't guess what the CEO that I do not know would do, but I would expect myself to reward them later, just not contractually. This is really relationship/person dependent.

[pbreit]

Is that really true? Two original founders with 0.5% each?

[aneth3]

Two former cofounders with a combined 1% of equity should not have any effect on the future of the company. Even if it did have some minor impact, those shareholders earned and deserve their shares. Companies regularly give shares to advisors, board members, employees, friends, landlords, etc...

I could be off a bit, but I don't think "extra" shareholders become an issue unless their stake is large (>5%) or there are a large number. Regardless, two minor former cofounders hardly seems a significant burden, and eliminating their stake for minor convenience is suspect.

If this was the justification used by the continuing founders, they were either ignorant or taking advantage of their former partners' ignorance.

> I wouldn't be suprised if the current CEO were to pay them on the backend regardless of his dance.

I wouldn't count on it. This is not generally human nature, nor is it compatible with the behavior reflected in this article.