Best way to move forward and clean cap table

Founded the company, worked for a year and a half developing it on my own, under DBA.

Filed C-corp and had someone force themselves in with 20% stock/equity. I resented them from forcing themselves in, they constantly would do back door deals and made it apparent that they wanted to take as much of our future profits as they can off my hard work and foreseeably try to take over the company. I terminated their position after being with the company for 3-4 months. They also were supposed to invest $5k and never did. We subsequently ran out of funding.

I continued on solo, going through extreme hardship, even being homeless and sleeping in a field for a time. Kept moving forward. Now have a new team and on track to fully fund our company, to where we can start generating profits.

Planning on dissolving the original company and refiling in a new state with a clean cap table, ready to take on the funding and launch the company into production.

Then, if there are any future issues with previous people, will go full Machiavelli on them.

Alternatively, could issue more stock and dilute them down to .00001 as there were only 10,000 original shares. Can issue 100,000,000 more.

Advised to ask previous share holder to rescind the stock, to just transfer to company to a different state, as when the company grows, the person could potentially try to sue the company later. Called to clarify that the person is out of the company, to give the stock back, they threatened to sue. It seems like a breakup when you’ve moved on and want your stuff back, but they can’t accept you don’t want to be with them and try to cause all sorts of issues, further making it clear why I didn’t want to work with them in the first place.

What are your thoughts Startup Community?

  • You probably didn’t file the Election 83B and they vested. The issue here is really around 409A. You can sell or bankrupt the company but if the former it has to be for fair market value.

    You may do better to just start from scratch and make sure any contracts are under a new company.

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