Agreed, I don't want the conversation to steer into an ultimatum nor using that line of reasoning. That will leave a sour taste in everyone's mouth.
I think the conversation can be approached in a more positive light and framed as ensuring all the hard work and long hours put in by me and other employees is fairly compensated and we get to retain the equity that vested.
As one of the key employees I have leverage. Am I irreplaceable? No, but it would definitely be a setback. One that the founder cannot afford at this time.
I can't speak for the other employees but I imagine they won't be happy either once they learn how the founder treats employees.
Besides appeasing existing employees there is the added benefit of attracting and retaining talent going forward. This is a great point that you mentioned and shouldn't be overlooked especially considering how competitive the valley is for talent.
Recently I learned that it is an industry standard to give employees 90 days to exercise their stock options after they quit or are fired (0 days if fired with cause). This whole time I was under the impression the expiration date was the latest one could exercise. I am stunned that all the sweat and hard work can go unrewarded.For now I am happy working at company X but who knows what will...