Assume an employee at startup company X has bought a small equity stake (<1%) in this company (we are not talking about granted equity but shares that have been bought at the current valuation of startup X at that time - so no vesting etc. is involved). Furthermore, assume that startup X is only doing so-so and that the employee starts interviewing for a new job with a larger and more established competitor Y. However, the employee cannot get rid of their equity in company X (because of various reasons). The employee does not have a non-compete agreement in their employment contract with X and there is no explicitly stated non-compete clause attached to the equity stake in X.
In your experience, would the equity stake in X be a handicap when interviewing for new jobs? I would assume that the above mentioned scenario is quite common in the tech space but my experience in the startup-world is quite limited. I want to specifically state that this is not a legal question about non-compete agreements or the like. I would like to hear from you guys how likely it is that the potential new employer Y is being turned off by a candidate who still owns equity in another company.