3 ms·

Do you have a vesting agreement in place? If not your investors will likely require one. What that agreement should say is something along the lines of "each f

Do you have a vesting agreement in place? If not your investors will likely require one. What that agreement should say is something along the lines of "each founder gets 1/48th of their shares for each month of having been at the company." There's usually a "cliff" of 1 year, but it looks like you're past that. That being said, you need to realize that you bailing may put everything in jeopardy, as investors are likely to be spooked, and will likely be unhappy with the significant dead weight of .33 * 18/48 of the company. If I were you I would strongly consider taking a smaller piece in order to give the company more room to grow. The fact that you're currently selling 25% of the company for 500k indicates to me that the company has a long way to go before spitting off serious profits, so I'd opt for whatever makes the company most likely to be successful, or you'll end up with $0 anyway. Also realize your "percentage" will change as more shares are issued, an options pool is created, more dilution comes in, etc.

charlesdm 9y ago
Not all investors do, and frankly, I've seen a case where a founder was pushed out by early investors after 24-36 months. In this example, they acquired his stake for $1M+. If no vesting currently in place, you have to do exactly nothing. The stake is yours. Your co-founders might not be able to raise investment, but you can't be forced to sell your stake. If you're reasonable, you pick a price for your shares and ask them to buy you out. If they are not willing to do that, just keep it.
- surfmike 9y ago
  Even from a self-interest standpoint though it's probably not wise of him to keep the full share, since it is a red flag to investors and decreases the pool of equity available to people who are working at the company.
- austenallred 9y ago
  Recognize this company is selling 25% of itself for $500k, meaning the entire company is "worth" $2m. I'd guess no one is going to buy OP's stake at these levels, given that he's likely 1/3 of what the investors are buying already. If OP wants to, OP can not agree to any vesting agreement, keep his whole stake, and likely do significant harm to the company in doing so (of course I'm making some basic assumptions here, but I think they're fair, and about as good as we can do considering the lack of information). If OP does that he or she is actually shooting him or herself in the foot, and destroying the value of his or her own shares. I can certainly see many scenarios where it's actually in OP's best interest to give up more of a stake, though it's impossible to know without knowing what type of company it is, revenue and growth rates, etc. If we assume it's a software startup raising at a $2m valuation I would strongly encourage OP to play the long-term game, as the likelihood the stake will be worth nothing if he or she takes 33% off the table right now is remarkably high.

charlesdm 9y ago

Not all investors do, and frankly, I've seen a case where a founder was pushed out by early investors after 24-36 months. In this example, they acquired his stake for $1M+. If no vesting currently in place, you have to do exactly nothing. The stake is yours. Your co-founders might not be able to raise investment, but you can't be forced to sell your stake. If you're reasonable, you pick a price for your shares and ask them to buy you out. If they are not willing to do that, just keep it.

surfmike 9y ago
Even from a self-interest standpoint though it's probably not wise of him to keep the full share, since it is a red flag to investors and decreases the pool of equity available to people who are working at the company.
austenallred 9y ago
Recognize this company is selling 25% of itself for $500k, meaning the entire company is "worth" $2m. I'd guess no one is going to buy OP's stake at these levels, given that he's likely 1/3 of what the investors are buying already. If OP wants to, OP can not agree to any vesting agreement, keep his whole stake, and likely do significant harm to the company in doing so (of course I'm making some basic assumptions here, but I think they're fair, and about as good as we can do considering the lack of information). If OP does that he or she is actually shooting him or herself in the foot, and destroying the value of his or her own shares. I can certainly see many scenarios where it's actually in OP's best interest to give up more of a stake, though it's impossible to know without knowing what type of company it is, revenue and growth rates, etc. If we assume it's a software startup raising at a $2m valuation I would strongly encourage OP to play the long-term game, as the likelihood the stake will be worth nothing if he or she takes 33% off the table right now is remarkably high.