4 ms·
I have a question - Is founder vesting standard outside the valley/software startups? If I and my partner set out to build (say) a restaurant franchise in Texa
by plinkplonk 8y ago
I have a question - Is founder vesting standard outside the valley/software startups?
If I and my partner set out to build (say) a restaurant franchise in Texas, do 4 year vesting schedules, cliffs, etc make their way into incorporation documents? How do things work in non-silicon-valley-startup businesses?
Either vesting is a part of standard business incorporation (in which case I don't see why it needs special discussion in a software startup context, we don't need to discuss whether a company should have annual or quarterly balance sheets, for example - such 'standard elements' are taken for granted) or it is highly software startup specific (in which case there might be interesting rationales for such provisions existing that are specific to software, software startups, or conventions of SV VCs)
- ThrustVectoring 8y agoSoftware is somewhat unique in that it takes relatively little capital to start a business, outside of the sweat equity that the founding team puts in. If you're opening a restaurant in Texas with someone, you're looking at something like $100k to $250k each, depending on local regulations and what kind of scale you want.
- albertgoeswoof 8y agoIt’s more that software is way riskier and unknown, so you’re forced to go with tougher demands from VCs instead of more traditional investors/debt
- kenneth 8y agoFounder vesting is usually set up either at the onset to protect multiple founders from breakups, or as a term requested by investors in a priced round of funding. If you set up a business of any type, you're free to give yourselves a vesting schedule or not. If you take on smart outside capital, it may be a term they require.