A growing business could easily find a sinecurial position for a founder that had outgrown his or her usefulness: the only reason to jettison this guy in such a

A growing business could easily find a sinecurial position for a founder that had outgrown his or her usefulness: the only reason to jettison this guy in such an amateur fashion is to avoid paying his salary or position him for dilution in future funding rounds. My guess is that the CEO is dealing with investor pressure and the CTO has been parachuted in by whoever is funding them, likely on the understanding that future funding is contingent on making the hire and "improving the team". The fact that they are worried about keeping him on through the next round suggests that these promises aren't even reliable. In which case this is a malevolent power play and there is no good reason for him to roll over -- the most likely outcome of this all is that the company dies. And either way -- this is a really horrible decision on the part of the CEO as well. Because what happens to HIM once his technical cofounder is gone? He'll be reliant on raising capital to fund an even more expensive team and won't even have the option of saying no and going back to running the business with the original team, something which is the most likely GOOD outcome for any small business and the only option that gives them any real leverage against outside investors.