Here are some other things to consider:

1. EXPENSE REIMBURSEMENT LAW: You didn't say where you're located, but check out California Labor Code section 2802, especially subdivision (c), at http://law.onecle.com/california/labor/2802.html:

--snip--

(a) An employer shall indemnify [that is, reimburse] his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

(b) All awards made by a court or by the Division of Labor
Standards Enforcement for reimbursement of necessary expenditures under this section shall carry interest at the same rate as judgments in civil actions. Interest shall accrue from the date on which the employee incurred the necessary expenditure or loss.

(c) For purposes of this section, the term "necessary expenditures or losses" shall include all reasonable costs, including, but not limited to, attorney's fees incurred by the employee enforcing the rights granted by this section.

--snip--

2. WRITTEN AGREEMENT? You didn't say whether you had a written employment agreement, stock-option agreement, etc. Any of those might contain a mandatory-arbitration clause; a jury-trial waiver (probably unenforceable in California); and/or other relevant provisions.

3. TIME SUCK: Lawsuits and arbitrations against former employers are a huge time suck for all concerned, but especially for the (former) employee. Ask yourself whether, at this stage of your career, the upside of equity in this particular startup justifies your making such an investment of your time. Because no matter what happens, you'll never get that time back.

4. SIGNAL TO FUTURE EMPLOYERS: If you file a lawsuit, future prospective employers won't know who's right or who's wrong. All they'll know is that you've sued a former employer. (They may well find that out when they run a background check.) That will trigger the fear that someday you might sue them. And that in turn could color their decision whether to hire you, or instead to hire the next person, who isn't suing their employer.

5. THE REST OF THE STORY: Your former employer's founders will have a different perspective. If you sue them, there's absolutely no doubt they'll tell their side of the story. Consider whether you want that made a matter of public record.

6. BRIAN REID EXAMPLE: Check out Brian Reid's story: He was fired from Google at age 52, nine days before the IPO. His options apparently would have been worth $10 million at the IPO; presumably they'd be worth a lot more now. His lawsuit against Google for age discrimination has been pending for years. Dr. Reid has a clear upside, plus what the court of appeal felt was a triable case, i.e., a case that at least had sufficient merit that it deserved to be decided by a jury instead of being summarily tossed out. From the facts you've given, it's not clear that either of those things is the case for you. http://en.wikipedia.org/wiki/Brian_Reid_(computer_scientist)...

7. KEEPING GOOD RELATIONS: Other commenters have made good points about the upside of keeping a civil relationship with your former employer, in the (perhaps-vain) hope that in the future they'll give you a decent reference or perhaps someday even want to hire you again.

8. USUAL DISCLAIMER: I'm not your lawyer, the above isn't legal advice because we don't have all the facts here, etc., etc.