OP, this seems like sound advice if you don't want to just walk away from the mess. You and your fellow free-worker have already raised the issue and have not

OP, this seems like sound advice if you don't want to just walk away from the mess. You and your fellow free-worker have already raised the issue and have not had a satisfactory outcome. If you stop working for free, they will pull the carrot away and you will get nothing. If you keep working for free, you will get nothing since you already have nothing. When you work for free, you are saying that your time and effort are worth nothing. Your "co-founders" got the message loud and clear and are unfortunately not "good" people so they are operating on that premise and yet they value the time and efforts of the new CTO.