Founder Vesting
I\u2019ve talked with numerous startups who has a founder that no longer works with the company and has taken their equity with them. One solution to this problem is called Founder Vesting \xa0 Many startups choose to structure the founder shares as restricted stock. This reserves some shares which must be \u201cearned back\u201d by the founder over time.\xa0 The longer the vesting schedule the more shares the founder earns.\xa0 The corporation holds the restricted shares until vested. Vesting founder\u2019s shares incentivizes them to stay with the company and remain engaged with the business.\xa0 If the founder leaves early, then the unvested shares could be used to compensate their replacement. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today!