Comments on: Careful about equity and options in early stage businesses https://berkonomics.com/?p=3133&utm_source=rss&utm_medium=rss&utm_campaign=careful-about-equity-and-options-in-early-stage-businesses Dave Berkus' business insights Wed, 24 Jan 2018 19:45:15 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Richard C Bruder https://berkonomics.com/?p=3133&cpage=1#comment-113886 Wed, 24 Jan 2018 19:45:15 +0000 https://berkonomics.com/?p=3133#comment-113886 Excellent post. But I take issue with the suggestion that founders should subject their shares to a buy sell if they leave the company “so a passive owner cannot vote against measure other active owners endorse.” Agreed, founders shares should be subject to vesting, BUT a founder who goes most of the distance, but leaves after, say 2-3 years (when his or her shares are partially vested), shouldn’t have to give up the bonanza at exit. Its possible the founder created great value in those 2-3 years, which will not be recognized in any valuation method at that point. Your concern can be solved by converting the vested equity into non-voting equity.

Thanks for your wisdom and contributions to the field.

]]> By: Michael Flynn https://berkonomics.com/?p=3133&cpage=1#comment-111695 Wed, 04 Oct 2017 16:31:10 +0000 https://berkonomics.com/?p=3133#comment-111695 yes, Invidiad’s challenge was, in our naiveté – not fully understanding the impact on valuation, our corporate counsel guided us to creating a “very generous” option pool. you might blog about that and the consequences of a large option pool when you go to raise money.

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