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How do I counter cofounder betrayal?

I started 2 startups with the same set of 3 (so total 4 co-founders).

First one, 3 of us brought in some of our savings to bootstrap our venture. Since it was clearly not enough, we brought in a private investor and sold too much equity (33%) for too little money ($50,000 USD).

Anyways, moving on, we made some money on the 1st venture but had to stop our work abruptly so we started another venture reinvesting the money we made on this venture into the 2nd one. I was financially drained in the first venture so it was decided that 3 of the 4 will bring the capital this time around and I will be contributing sweat equity by working fulltime on a 50% reduced salary. The others need not be ever present. I was promised 18% stake holding in return for my sweat and my contribution from revenues of Company #1 (where I hold 27%).

The person in charge of legal documentation took ages to complete the full legal process while I was slogging 90 hours a week trying to bring stability and revenue to the 2nd company.

When the documentation was finally done 10 months after we started, I found out that I had exactly 0% stake holding in the 2nd company. I took this up with the rest of the guys and gave them a 30 day deadline to fix this. They did nothing. I quit.

My 30 day notice period ended on 17th July 2015. I have 0% equity and company has not yet paid me for 4.5 months of my services (at 50% reduced wages from a total of 11 months). I still have to co-operate and play nice since these guys are still partners of my only company (#1). How do I overcome this situation and get what is rightfully mine?

P.S.: This is India. I cannot use the legal system or I will be twice my age before the courts give me anything.

  • If the first company was making money and you have equity in that, make that rain dollars. Leave the second company to die.

    Reply

  • Sorry mate, but it seems like you got suckered. It should not take 10 months to do a SHA. They should have 1 on hand, needing only slight variation.

    I hate to break the bad news to you.

    Reply

  • Outsource your negotiations to the nearest THUG for a piece of your slice of the pie. Let him handle it from there.

    They’re stealing from you. Act accordingly (and download the theme from the Godfather into your phone). 🙂

    Reply

    • Hey there, OP here. Here’s what I have thought of.

      I will go to the police tomorrow morning, give them the facts and figures and report that I am going to company #2 to salvage whatever I can.

      Over lunch, go to office, pick up all saleable assets(Macs, iPhones, laptops etc.) which will cover my dues. Lock them out of their own git and work email(because I set it up in the first place and they are still clueless).

      Then the negotiations can start.

      Reply
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