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One important part you need to add: The equity vests over time. So if one of the co-founders leave they just walk away with the part they earned over time and n
by tomaha 8y ago
One important part you need to add: The equity vests over time. So if one of the co-founders leave they just walk away with the part they earned over time and not the same share as the rest that stays.
- karmajunkie 8y agoA vesting schedule is so crucial. Many founders find themselves in the position of being partners with someone who is all but inactive with a substantial portion of equity. Not only is it unfair to those doing the work but even if all parties are willing fixing the split later can be costly, time consuming, and have serious tax implications.
- windows_tips 8y agoVesting isn't perfect though. It treats all contributions the same and only really looks at the time it took to do some work. The ideal situation seems to be that anyone doing work immediately vests ownership upon performing the work.
- mooreds 8y agoThis is so important. It keeps everyone motivated and aligned. If someone leaves, they keep what they've earned, but don't accrue additional ownership.
- btrautsc 8y agoThis is a great point I did in fact miss. Granting stock (not options) with no vesting schedule is probably one of my biggest regrets.