[codingwagie]

I've commonly seen grants like this diluted to almost zero. I would think carefully and strategically about how you can get some sort of value for the equity you vested. Its probably harder than you think to get decent liquidity on it.

[icedrop]

Is it legal to dilute this to zero? Can't you sue post-exit (e.g. Saverin and Facebook)?

[ldjkfkdsjnv]

It happens all the time, I have seen it in NYC. Usually its an early stage thing, cofounder leaves after 1 year etc. Much harder to do with a complicated cap table. Investors I could name even suggest it

[apparent]

Suing would only make sense if the dollar value is very high.

[tptacek]

At a normally-papered startup? Yes. No.

[takklz]

The juice has to be worth the squeeze. No sense in fighting against fiduciary duty, minority shareholder oppression, etc., etc. unless there is some sort of value there. This usually means a successful exit before taking action.

[tptacek]

I think we're saying the same thing --- that none of this matters, just walk away with the vested shares and be a friend to the company. Diluting his founder shares in subsequent rounds is going to be a nonevent, and diluting him to zero in an acquisition --- unless it's a seller's market or a bidding war --- may be as well. It's just not worth worrying about; I think the only real question here might be "do I take a buyout if offered", and this person is nowhere near that yet.

[takklz]

Ahhh yes same thing