My response to the TechCrunch article about vesting founder equity.
First of all, I don’t believe in vesting a founders equity. I know all the reasons in favour, but don’t agree. If you start a company, you own it until something is traded in return. I believe a founder is a founder.
The article advocates increasing the vesting schedule for founders, which I think is way wrong. I understand some of the reasoning, mainly holding more equity for future contributors., but I don’t think taking equity from founders is the answer.
Here’s the link to TechCrunch article: Solve the ‘dead equity’ problem with a longer founder vesting schedule
My Response:
Yeah, I don't think this would work for original founders. First, a founder is a founder, someone who joins years later is not, especially after funding or first revenue. The real founders originate the company, invent it. The inherent risk is exponentially higher early on; the original people have no idea if they will succeed. Four years is too long in my mind. Also, everyone involved makes an agreement, in writing. They know the program. I've been on both sides of this problem many times. In support of your argument, I think that most first time founders don't realize what happens when one of their cofounders leaves –– they want to imagine they will be together forever. An eight year vesting is better for investors, but not for real entrepreneurs. Maybe a stock buyback plan would work.
#equity #founders #startups