Ask HN: How to leave a startup when you own a third of it?

Post by greglindahl » Wed, May 17, 2017, 5:05 PM UTC

erikb wrote: post #14

It sounds like you own a contractually agreed upon amount of shares. Since it's not an employment contract but ownership you can just walk away and keep all your shares until you or the company dies. If they want you out they can buy your shares. But otherwise there is no problem with keeping the shares and walking away. Before I had to fight for my legal rights a few times I always considered agreement more importan…

Post by greglindahl » Wed, May 17, 2017, 5:11 PM UTC

j_s wrote: post #50

uiri wrote: post #44

Earlier quoted context omitted.

Next time start with vesting (which a lot of people are mentioning) so that the other founders continue to earn shares and dilute the departed co-founder's stake over time. Ideally, founder ownership in the company is compensation in lieu of (or in addition to a meager) salary. The founders who stay on board might try to dilute the departed co-founder's stake to nothing. Mark Zuckerberg did this to Eduardo Saverin. A…

Thanks! I am looking for a boilerplate / template for startup legal documents, intended to be taken to a lawyer for finalization as a part of getting the ball rolling. Something that included vesting + protection from dilution would have been useful here.

Post by greglindahl » Wed, May 17, 2017, 5:14 PM UTC

phonon wrote: post #54

raverbashing wrote: post #15

> raise 500K for 25% This puts the company at a valuation of 2M After that you would have 1/3 of 75% of 2M, that is, 495k You can base your "how much" answers on the above calculation (and previous money raised) If you really don't want to be a part of it anymore, propose them to pay you in installments (depends on the company cash flow)

Common vs. Preferred stock. Divide your result by a factor of 5 or 10.

Post by angersock » Wed, May 17, 2017, 5:18 PM UTC

anovikov wrote: post #74

nealbozeman wrote: post #67

Earlier quoted context omitted.

Investors will not see his 10% ownership as a red flag any more than they will see a non participating investor owning 25% of the business as a red flag. In this case, he/she delivered 18 months of value that led to a 1.5mm pre money val. The most fair option is already mentioned - to maintain your 33% that makes all three of the founders equal as of today, and then allocate a new share allotment to dilute you out ov…

If i was an investor, i'd see it as a red flag indeed. I'd think: 'so this guy left the boat being a founder, giving up most of his share, so probably he knows that the company is going to tank and don't want to waste his time anymore, and he definitely knows a lot more about it than i could potentially know being an outside guy'.

Post by empath75 » Wed, May 17, 2017, 5:28 PM UTC

anovikov wrote: post #74

nealbozeman wrote: post #67

Earlier quoted context omitted.

Investors will not see his 10% ownership as a red flag any more than they will see a non participating investor owning 25% of the business as a red flag. In this case, he/she delivered 18 months of value that led to a 1.5mm pre money val. The most fair option is already mentioned - to maintain your 33% that makes all three of the founders equal as of today, and then allocate a new share allotment to dilute you out ov…

If i was an investor, i'd see it as a red flag indeed. I'd think: 'so this guy left the boat being a founder, giving up most of his share, so probably he knows that the company is going to tank and don't want to waste his time anymore, and he definitely knows a lot more about it than i could potentially know being an outside guy'.