Startup promised me 2% equity as employee #3 but never issued the shares - company just got acquired

I joined a startup in 2022 as employee #3. During negotiations, the CEO verbally promised me 2% equity and sent an email confirming "2% equity stake vesting over 4 years." I accepted a below-market salary of $85k (market rate was $130k+) specifically because of this equity promise.

I worked there for 3 years, helped build the product from scratch. The company was just acquired for $40M.

I have the email promising 2% equity. Is this enforceable? What are my legal options? I'm in California and the company is a Delaware C-corp.

Work in VC and see stuff like this occasionally during due diligence. The acquiring company's lawyers will 100% find this if you assert your claim. They'll see the email chain, see no corresponding option grant in the cap table, and flag it as a risk.

Smart acquirers will either require the seller to resolve it pre-close or set aside escrow funds for potential claims. Either way, making noise now while the deal is pending gives you leverage.

question - does this change if you're a contractor vs employee? i was brought on as 1099 contractor with verbal promise of 0.25% equity after 6 months. now they're saying contractors "arent eligible" for equity even tho the CTO specifically said I'd get it

no email just slack messages. probably screwed right?

Depends on jurisdiction and specific facts, but generally the offer letter can supersede or modify the stock agreement if there's a conflict, especially if you can show you relied on the offer letter terms when accepting.

This is definitely worth raising with the company - show them the offer letter discrepancy and ask them to amend the option agreement. If they refuse, consult an attorney. The fact that you signed doesn't necessarily waive your rights to what was originally promised.

Also: Read everything before you sign in the future. I know it seems obvious but so many people don't.

One thing to watch in the settlement: make sure it includes a release of claims that goes BOTH ways. You don't want them coming after you later for some BS claim about confidentiality or non-disparagement.

Your lawyer will know this but worth double-checking the language smh.

Just found this thread while researching my own situation. Mine's a bit different - I DID receive my option agreement, exercised my options when I left, paid the strike price... and then the company never actually transferred the shares to me. That was 14 months ago.

They keep saying it's "processing" but I'm starting to wonder if they even exist. Company is still operating, raised another round since I left. This is a different issue, right?

Sharing this thread with my entire team. We're at a Series A startup and half of us realized we never got formal option agreements, just offer letters mentioning equity.

Going to collectively ask for documentation. Strength in numbers hopefully.