If I Launched a Startup
31–39 of 39 posts
Re: If I Launched a Startup
#32Earlier quoted context omitted.
If you get acquired, the payout schedule gets renegotiated anyway. So what's the point?
kinda chicken and egg... why do they have an 'acceleration of change control' if it gets renegotiated anyway? I figure its worth mentioning either way.
It's a good question. Paging grellas?
Anyway - single-trigger acceleration can lower the valuation of an acquisition, because the founder can then walk away. This is something VCs won't really like. Double-trigger is more usual.
Re: If I Launched a Startup
#33I actually don't understand the straight 4 year vesting schedule for founders. It seems unfairly favoring the investors. For founders who have poured their hearts and souls into building product and market initially, they still have to wait for 4 years after accepting funding to get their full reward? And risk losing their work along the way? And yes, many founders have been forced out from their startups before their 4-year schedule.
For startups that have product and market before funding, it would be more fair to have a "regressive" vesting schedule, e.g. 25% immediately vested, 30% 1st year, 20% 2nd year, 15% 3rd year, 10% 4th year.
Re: If I Launched a Startup
#34I actually don't understand the straight 4 year vesting schedule for founders. It seems unfairly favoring the investors. For founders who have poured their hearts and souls into building product and market initially, they still have to wait for 4 years after accepting funding to get their full reward? And risk losing their work along the way? And yes, many founders have been forced out from their startups before thei…
It prevents a founder from quitting early and keeping all their stock. The article doesn't mention it, but usually there is an acceleration clause that fully vests the shares if the company is acquired.
Re: If I Launched a Startup
#35I actually don't understand the straight 4 year vesting schedule for founders. It seems unfairly favoring the investors. For founders who have poured their hearts and souls into building product and market initially, they still have to wait for 4 years after accepting funding to get their full reward? And risk losing their work along the way? And yes, many founders have been forced out from their startups before thei…
It prevents a founder from quitting early and keeping all their stock. The article doesn't mention it, but usually there is an acceleration clause that fully vests the shares if the company is acquired.
Usually I see the start date for 4 years for founder vesting back-dated to start when the people actually started working on the project, not necessarily from taking funding or even incorporation.
Re: If I Launched a Startup
#36I actually don't understand the straight 4 year vesting schedule for founders. It seems unfairly favoring the investors. For founders who have poured their hearts and souls into building product and market initially, they still have to wait for 4 years after accepting funding to get their full reward? And risk losing their work along the way? And yes, many founders have been forced out from their startups before thei…
It prevents a founder from quitting early and keeping all their stock. The article doesn't mention it, but usually there is an acceleration clause that fully vests the shares if the company is acquired.
This is in a founder's interest only if there is more than one founder. If it's a single founder, there is no incentive for them to agree to this.
Re: If I Launched a Startup
#37It is great that he summarized many of his posts in one concise post. I've read and followed his advice to form my first corp recently. But it took a few days of research to understand what he was saying and why. It still costed me over $2k to get incorporated though.
> It still costed me over $2k to get incorporated though.
Getting a lawyer to double-check things, or something else?
Re: If I Launched a Startup
#38"Asking a VC to sign a NDA is tantamount to splitting 10’s at the blackjack table" - Funny.
> "Asking a VC to sign a NDA is tantamount to splitting 10’s at the blackjack table"
Splitting 10s makes sense in certain circumstances.
VCs will sign NDAs when doing so benefits them. Such situations do exist, but they're rare.
Re: If I Launched a Startup
#39It is great that he summarized many of his posts in one concise post. I've read and followed his advice to form my first corp recently. But it took a few days of research to understand what he was saying and why. It still costed me over $2k to get incorporated though.
> It still costed me over $2k to get incorporated though. Getting a lawyer to double-check things, or something else?
Just getting a lawyer to double check things. Just the base fees of DE incorporation, getting a registered agent then register as a foreign entity will cost you around $500.