Founder Vesting by Chris Dixon

  • Source link: https://cdixon.org/2009/04/21/founder-vesting
  • TL;DR: All startup employees should vest over 4 years, and founders should have acceleration on change of control.
  • How helpful?: 4/5 
  • Topic Tags: vesting, term sheet
  • Relevant questions addressed:
  • What kind of employee vesting clauses should be in the term sheet?
  • Summary bullet points
  • All startup employees should vest over 4 years, with a 1 year cliff.
    • Not only is it unfair for an early, non-participative partner to hang on to a ton of equity, but it also means there is less equity to give out to future employees
  • Founders should have acceleration on change of control
    • Full acceleration on double trigger (company is acquired and you are fired)
    • Partial acceleration on single trigger (company acquired and you remain)
      • Gives acquirer assurance that key people will be around for specified amount of time, but doesn’t lock employees in for years
  • Follow up links