Scott Edward Walker
SEPTEMBER 28, 2011
And please don’t tell us to hire a lawyer.) Vesting Restrictions. The first deadly mistake relates to vesting restrictions. Assuming we mess something up, are there any mistakes that can’t be fixed down the road? Answer Below are four mistakes that could destroy your venture down the road if not handled properly today.
Both Sides of the Table
MAY 9, 2011
Hire your co-founder. Vested over 4 years. Truly treat them like a co-founder. Involve them in fund raising, hiring, strategy, etc. So trust me when I tell you that you can hire incredibly talented people for 30% of your company. Give them a large sum of equity. I talk about that in more detail here.
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venturehacks.com
FEBRUARY 24, 2010
Breakups are hard If you’re going to fall out with your co-founder, do it early, recover the equity into the option pool to keep the company going, and recruit someone else great to fill the missing slot. Build in founder vesting (a.k.a. Geeks can always be hired.
Steve Blank
JULY 19, 2010
The customary vesting model has founders vest their stock over 4-years , and when the founding CEO gets in over their head the VC’s bring in professional management. Founding CEO’s need to agree that it’s rare that founders are the right people to take a startup through the transition to build and scale it into a company.
Andrew Payne
SEPTEMBER 9, 2017
If an early very experienced developer has 1%, and a less senior dev has 0.5%, those become two reference points for the next dev hire. If we allocate (say) 15% for future hires and 40% to investors for the first round (or rounds), that means founders are splitting the remaining 45% of the company, per their agreed-to relative ownership.
ithacaVC
JUNE 20, 2011
3. You are hiring employees: hiring employees comes with a host of issues such as (i) non-compete agreements, (ii) ownership of invention agreements, (iii) employee tax withholding, (iv) employee safety policies (like no harassment and privacy, etc.), Lawyer time required: 5 to 10 hours dependent on how fast you are hiring.
venturehacks.com
SEPTEMBER 22, 2011
In practice, you raise money or hire an employee because you need to, not because you want to. Say the equity equation tells you to pay a prospective hire above market. You should still pay the hire a market rate and save the company some equity. Say the equity equation tells you to pay a prospective hire below market.
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