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How is this possible if most employee stock has right of first refusal built-in?
by YuriNiyazov 10y ago
How is this possible if most employee stock has right of first refusal built-in?
- cloudjacker 10y agoThat's for transferring, the sale only. And the lack of transparency means we also don't know if "most" is really like that, no matter how standard your CEO said it was. The three startups you worked for probably share some venture capital firm or related board member that copy and pasted the equity contract But it didn't mean, necessarily, that condition is so prevalent or that much of a roadblock
- YuriNiyazov 10y agoDude. Bro. I advise other people on their stock grants, and see this all the time. Thanks for assuming I'm just a schlob.
- cloudjacker 10y agoESO Fund?
- dsjoerg 10y ago"just a schlob". on my next business card.
- gilbug 10y agoHi, company lawyer here. Sorry if that sounded dismissive. You're completely right that there's a right of first refusal built somewhere into most stock issuances to team members. They vary in who holds the right, the range of transactions that trigger the right, exceptions to the right, and how it operates. Accordingly, we look at the paperwork for each company and each shareholder in order to structure a transaction that works, if possible.
- x0x0 10y agoWould the employee care? The right of first refusal means your employer has to match the $. Buyers may be scarce if too many employees are so encumbered though. Is that your concern?