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This is the bog standard arrangement, please ask Jim if he will abide by that standard. If he doesn't agree, he's really acting in bad faith. There's not much you can do with a bad faith co-founder and no pre-existing arrangement.

Not to mention that Jim could be in a precarious position. OP retains all of their shares that were initially agreed upon so offering to retroactively do vesting helps Jim a bit.

However, since OPs cofounder paid out of pocket for the app, I'm not sure what the StartupInc actually owns. But that also means the possibility of piercing the corporate veil - which is also bad.

I'm not a lawyer, but I did have a startup where my cofounder gutted the company after trying to stage a coup - then created a very similar company. He'd signed all the NDAs, non-competes (these ARE enforceable, even in CA, with co-founders/execs) etc.

I never went after him.

Instead, I waited to see: would he be able to steal my idea, connections, and clients to be successful on his own. If so, I planned on getting my share through legal proceedings.

Short version, a few years later one of his 3 co-founders quit, a year later the other did, and now the company is gone.

I'll avoid giving OP advice based on my one story, but another poster made a good point: there is very little to be gained.

Legally, though, I believe that - short of creating a new corporate entity or watering down the stock (both possible, though they come with risks RE getting sued by OP) - OP will retain all of their shares.

Of course, being not a lawyer, there are likely major gaps in my understanding and OP should at least have a chat with one.

I'll try, thanks a lot! :)

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