Assuming all terms of investor agreements are “standard” (ie NVCA model docs), the co-sale rights granted to the investor would usually ONLY let them sell up to their pro-rata share of the company. In other words, you’d expect the terms of the docs to prohibit any founder or investor from selling their entire stake without allowing others to participate in the sale. This isn’t an unreasonable protection for a minority investor… imagine you invest $5M as the lead investor in a series A round. At this stage you’re often betting as much on the founding team as anything else - there’s just not a track record of financial performance, so at this stage you’re partially counting on the founders to do great things (this is why founders with multiple exits under their belts can raise easier - even in the absence of financial performance for THIS company, there is a history of success you can at least reference). Now assume the founding team decides they want to sell 80% of their stake in the company - you bet on the team as much as the product, and now they’re selling off a huge portion of their holdings. Your investment just got materially riskier - your founders are no longer nearly as (financially) incentivized to make the company a success, and you made a bet on THEM. If you’re getting off the bus, I wanna be able to get off the bus as well. If you’re gonna just put one foot out the door, I’m gonna put one foot out the door as well. Totally reasonable for the investor to want this protection.

If I’m speculating on what could be going on here, not all investors are as helpful as they promise they will be before they write a check. Maybe this investor is a bully. Maybe they promised to make connections that never came through. Maybe they just ask dumb questions at board meetings and you have better things to do than explain the thing that they would have understood if they’d only read the pre-reading you sent out ahead of the board meeting! It’s also perfectly reasonable in that sort of scenario for the founder to want to create a scenario where the investor is going to be out of their hair. It’s also possibly more benign, and just that the cap table is messy and they want to consolidate down to fewer major investors, and partial sales don’t help that cause. In either case it’s worth trying to say that the investor has to sell all or nothing if you think they want/need the cash - It doesn’t mean it’s gonna work if that’s not what the legal docs say is required, but it’s worth shooting your shot. If neither of those scenarios though, and they like the investor, best thing to do is to let them take their pro-rata portion of the secondary and move on - it’s definitely the fairest way to run a secondary process, even if it does inevitably reduce the amount available to the founder to sell.