Even if the shares are non-voting, converting half the founder's shares into dead equity in the cap table creates problems for the other investors. It isn't onl

Even if the shares are non-voting, converting half the founder's shares into dead equity in the cap table creates problems for the other investors. It isn't only about voting rights. For example, they may need to top off the founder's equity to maintain an acceptable level. This either requires unplanned dilution for no additional benefit to the company or reallocating equity from somewhere else. Basically, other people with an active interest in the company may have to eat a loss due to the conversion of founder stock to dead equity, it isn't just the founder that loses. Investors avoid cap tables with a lot of dead equity in any case, so it will also make it harder to raise money in the future.