4 ms·
Even founders have a cliff?
by underwater 11y ago
Even founders have a cliff?
- sama 11y agoYes. We pretty much won't invest without that.
- BryanBeshore 11y agoEveryone should have a cliff, even founders (generally 4-yrs total. 1-yr cliff, then vest every month thereafter). If I recall correctly, every company that goes through YC have cliffs built into their legal documents - or must have them built in when the program commences - for both founders and employees.
- tptacek 11y agoRun, don't walk, from cofounders who refuse a cliff.
- rajacombinator 11y agoThe 1 year cliff is a standard SV term that should be reconsidered IMO, because it distorts incentives significantly. A founder/employee who decides between months 6-12 to leave the company has a substantial incentive to stay on in coast mode until the cliff hits. Meanwhile the company continues to lose equity and salary to someone who is no longer committed. Standard vesting already aligns incentives well without a cliff.