There are other avenues like trying to pressure VC / board members, court, probably more.
The problem is that lawsuits often take years. These startups are likely going to be (a) 10 times their current size, or (b) out of business, by then. So they can take a "we'll worry about it then" approach, in which case they collect interest on what they should have paid, and offload the risk.
These kinds of unethical startup executives don't fear lawsuits. Not in the least. The suit will be against the company, not the person-- it's very hard to pierce the corporate veil on this sort of issue-- and the individual executive will either be no longer with the company, or very wealthy and successful by then (in which case it's a hired attorney's PITA). Either way, it's not going to hurt him much.
The small-claim lawsuit doesn't have an incentive effect on such a startup because of this binary payoff. The advantage of a PR hit, as a punitive measure, is that it actually reduces the probability of success (rather than trivially reducing the amount of payoff in event of success).
The problem is that lawsuits often take years. These startups are likely going to be (a) 10 times their current size, or (b) out of business, by then. So they can take a "we'll worry about it then" approach, in which case they collect interest on what they should have paid, and offload the risk.
These kinds of unethical startup executives don't fear lawsuits. Not in the least. The suit will be against the company, not the person-- it's very hard to pierce the corporate veil on this sort of issue-- and the individual executive will either be no longer with the company, or very wealthy and successful by then (in which case it's a hired attorney's PITA). Either way, it's not going to hurt him much.
The small-claim lawsuit doesn't have an incentive effect on such a startup because of this binary payoff. The advantage of a PR hit, as a punitive measure, is that it actually reduces the probability of success (rather than trivially reducing the amount of payoff in event of success).