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> but also putting themselves in a place where they might have to go after people's salaries, Disagree. Part of the term is that both parties will agree to a
by DevX101 8y ago
> but also putting themselves in a place where they might have to go after people's salaries,
Disagree. Part of the term is that both parties will agree to a minimum salary that is not subject to dividends. So if you and the investor would have to agree in advance that founder salary will be $100k.
This clause protects them in the case, the founder decides to unilaterally pay themselves a $500k salary, but go back to the VC and say, "sorry, we had no profit this year. no dividend for you"
- tylertringas 8y agoExactly. In this structure, founder can pay themselves whatever salary they want but any amount above an agreed cap is added into Founder Earnings and subject to dividend sharing.