Founder Vesting
Definition
Founder vesting subjects founders’ own shares to a vesting schedule (typically four years with a one-year cliff), so a departing founder keeps only what has vested.
How it comes up in fundraising
Investors require it at the first priced round if not already in place; it protects everyone, including co-founders, from a departed founder holding a large dead stake.
Frequently asked questions
Why should founders accept vesting on their own company?
Because the biggest beneficiary is the remaining team: without it, a co-founder who quits in month six keeps their full stake while others build the value.
What is an 83(b) election?
A US tax filing made within 30 days of receiving restricted stock that locks in tax treatment at grant-time value; missing the window is a classic and expensive mistake.
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