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September 10, 2009


While I fully agree with your thinking leading to accepting founder vesting, I see so many ways this can turn sour for the founder.

True, if progress is amazing, VCs would be stupid to fire the founder but no matter how rarely, greed happens. If there's no progress everyone loses and only idiots will fight for a % of nothing. Now what about most of the cases where the actual progress falls in the grey zone where some think it's fine but others don't. What will happen?

Pushing someone to quit is far more rare. How about VCs blatantly declaring you're out for just cause because the situation falls in one of those cases where they can buy your shares back for the nominal value? (stealing and quitting is clear but how do you legally define "you suck"?)

If you won't be able cover the legal costs of defending yourself --because all your money is in your startup and you've paid yourself barely enough to pay your bills-- wouldn't it be very naive to put yourself in a situation such founder vesting will put you in? When relationships turn sour, it's not a fair battle between founders and VCs, why put clauses in the contracts which gives them even more clout?

Edit: I meant "Pushing someone to quit is far FROM rare." not "Pushing someone to quit is far more rare."

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