As the Anton of Ariel and Anton in this post, the logic behind returning the shares is based on the fact that the business should really have been restarted with a fresh cap table rather than keeping the old cap table in tact. The old cap table was maintained for reasons of convenience, and given that the company has a completely different product, focus, code-base, team, etc etc, I only have shares in this company on the basis of the poor decision to not launch a new company.

Also - Paul and Tal are awesome guys who have been hard at work for 4 years without any input from me. I think Ecquire will be a great success, and the divestment of my shares has nothing to do with my perception of the company's potential.

You are certainly entitled to give up whatever equity you like, and perhaps you are a better man than me for not feeling you deserve such a minor stake. If you feel you did the right thing and fully comprehend the situation, it is not my place to challenge your decision. I'm only expressing my thoughts, and my feeling that this is not the way to handle pivots with former co-founders anymore than it is a way to handle pivots with investors.

I don't know how long and hard you worked, how related your work was to the ultimate direction, whether you participated in early fundraising, advised the continuing founders, etc. All of those could impact my thoughts on this. Going on the assumption that you worked long and hard - you contributed to the ultimate direction and team and you earned something.

"Pivots" are all the rage in startups these days. Why is it any more acceptable to ask for vested founder shares to be returned than to ask for shares to be returned from early cash investors or advisors? Does YC return shares to founders who pivot after leaving YC?

I think it can be fair to renegotiate stakes according to impact, as it appears you did to get down to 0.5%, but eliminating clearly earned stakes entirely seems rarely justified. Re-incorporation makes sense in many cases, but in others will open the new company to accusations of fiduciary violations largely for the same reasons.

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.

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

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.