Comments on: Founder vesting http://cdixon.org/2009/04/21/founder-vesting/ Thu, 11 Mar 2010 19:30:15 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: CUSEC 2010 Keynote: Pete Forde – “NSFW” — Global Nerdy http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-6599 CUSEC 2010 Keynote: Pete Forde – “NSFW” — Global Nerdy Fri, 05 Feb 2010 22:24:31 +0000 http://www.cdixon.org/?p=164#comment-6599 [...] Look up what Chris Dixon has written about founder vesting [...] [...] Look up what Chris Dixon has written about founder vesting [...]

]]> By: How to pick a co-founder | Modern City Life http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-4828 How to pick a co-founder | Modern City Life Wed, 18 Nov 2009 17:38:29 +0000 http://www.cdixon.org/?p=164#comment-4828 [...] pool to keep the company going, and recruit someone else great to fill the missing slot. Build in founder vesting (a.k.a. the “Pre-Nup”) to keep the breakup from getting messy. Building a great company [...] [...] pool to keep the company going, and recruit someone else great to fill the missing slot. Build in founder vesting (a.k.a. the “Pre-Nup”) to keep the breakup from getting messy. Building a great company [...]

]]> By: Ryan Graves http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-2483 Ryan Graves Mon, 14 Sep 2009 14:08:08 +0000 http://www.cdixon.org/?p=164#comment-2483 Chris - Extremely helpful post, I'm going through the process of writing up these docs and am about to get a lawyer to help finalize them for us. Very much appreciated. Cheers, Ryan Chris – Extremely helpful post, I’m going through the process of writing up these docs and am about to get a lawyer to help finalize them for us.

Very much appreciated.
Cheers,
Ryan

]]> By: vsagarv http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-2425 vsagarv Sun, 13 Sep 2009 08:12:20 +0000 http://www.cdixon.org/?p=164#comment-2425 Your post is very timely. We've just met our lawyer to draft the founder vesting agreement. Still discussing full/partial acceleration on triggers. And yes, the vesting clock should start from the day the idea is bootstrapped (and not necessarily delayed until formal incorporation happens). Your post is very timely. We’ve just met our lawyer to draft the founder vesting agreement. Still discussing full/partial acceleration on triggers. And yes, the vesting clock should start from the day the idea is bootstrapped (and not necessarily delayed until formal incorporation happens).

]]> By: John Gannon http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-2417 John Gannon Sat, 12 Sep 2009 23:53:12 +0000 http://www.cdixon.org/?p=164#comment-2417 Chris- any thoughts regarding vesting based on value created instead of strictly time based? For example, letting a founder vest x% of shares when they hit a key milestone? Chris- any thoughts regarding vesting based on value created instead of strictly time based? For example, letting a founder vest x% of shares when they hit a key milestone?

]]> By: Michael http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-2416 Michael Sat, 12 Sep 2009 23:36:36 +0000 http://www.cdixon.org/?p=164#comment-2416 I personally think 4 years is too long in most cases; I guess because I believe if a company is not situated, financially and otherwise, in that time then there are more critical matters to be concerned about. I have always positioned a 2-3 year vest for founders at time of incorporation; with acceleration based on company milestones and achievement. If after 2 years the company is generating profit and has maintained fiscal upswing than the contributing founders (and employees) shoud ensure they are protected for the next phase - be that acquisition or growth capital. Seems to me it helps transition everyone to focus on generating revenue instead of raising capital. However I do agree however that it is insane to award unvested ownership in any venture. Cap tables are only worth as much as the efforts by people vested in them. I personally think 4 years is too long in most cases; I guess because I believe if a company is not situated, financially and otherwise, in that time then there are more critical matters to be concerned about. I have always positioned a 2-3 year vest for founders at time of incorporation; with acceleration based on company milestones and achievement. If after 2 years the company is generating profit and has maintained fiscal upswing than the contributing founders (and employees) shoud ensure they are protected for the next phase – be that acquisition or growth capital. Seems to me it helps transition everyone to focus on generating revenue instead of raising capital. However I do agree however that it is insane to award unvested ownership in any venture. Cap tables are only worth as much as the efforts by people vested in them.

]]> By: chris http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-2410 chris Sat, 12 Sep 2009 22:15:37 +0000 http://www.cdixon.org/?p=164#comment-2410 William - thanks. I'm going to keep repeating myself on this issue over and over until it gets through. It's really a shame how many companies have legacy founders using up the cap table. William – thanks. I’m going to keep repeating myself on this issue over and over until it gets through. It’s really a shame how many companies have legacy founders using up the cap table.

]]> By: William Carleton http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-2409 William Carleton Sat, 12 Sep 2009 22:13:52 +0000 http://www.cdixon.org/?p=164#comment-2409 Bravo! I don't think 4 years is the right span for every venture, and I don't think you need to wait for a term sheet to do this. In fact, founders should do this when they incorporate (even if they have to revisit it on outside funding later, which, often, they don't). It is totally demoralizing to deal with a situation where a founder leaves the others building the wealth, yet taking too much of the equity the others build. And the cap table never recovers; you can never really accomplish a re-cap without hurting the deserving, too. Bravo! I don’t think 4 years is the right span for every venture, and I don’t think you need to wait for a term sheet to do this. In fact, founders should do this when they incorporate (even if they have to revisit it on outside funding later, which, often, they don’t). It is totally demoralizing to deal with a situation where a founder leaves the others building the wealth, yet taking too much of the equity the others build. And the cap table never recovers; you can never really accomplish a re-cap without hurting the deserving, too.

]]> By: The worst time to join a startup is right after it gets initial VC financing | Bookmarks http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-1521 The worst time to join a startup is right after it gets initial VC financing | Bookmarks Tue, 25 Aug 2009 18:11:25 +0000 http://www.cdixon.org/?p=164#comment-1521 [...] prior to Series A.(Also, toss in there along the way one founder gets disgruntled and leaves - see founder vesting).The problem is a Series A financing usually de-risks the company far less than the equity grants [...] [...] prior to Series A.(Also, toss in there along the way one founder gets disgruntled and leaves – see founder vesting).The problem is a Series A financing usually de-risks the company far less than the equity grants [...]

]]> By: cdixon.org / The worst time to join a startup is right after it gets initial VC financing http://cdixon.org/2009/04/21/founder-vesting/comment-page-1/#comment-1490 cdixon.org / The worst time to join a startup is right after it gets initial VC financing Tue, 25 Aug 2009 02:52:16 +0000 http://www.cdixon.org/?p=164#comment-1490 [...] (Also, toss in there along the way one founder gets disgruntled and leaves - see founder vesting). [...] [...] (Also, toss in there along the way one founder gets disgruntled and leaves – see founder vesting). [...]

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