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Equity is given before most of the expected value is provided, so it's important to have a mechanism to reclaim it if the expected value never materializes. Th
by danshapiro 15y ago
Equity is given before most of the expected value is provided, so it's important to have a mechanism to reclaim it if the expected value never materializes. That's why vesting is so important.
If you decided to provide less than the expected amount of money, you would receive less than the agreed amount of equity, but it's really apples and oranges.
- joshontheweb 15y agoThe value expected from investors is longterm as well. Many startups take money from investors as a mechanism to get them on their board, provide mentorship and make connections. If the investor doesn't follow through on the mentorship, should he receive less equity?
- jsavimbi 15y agoI've seen early-stage investors cashed-out and escorted from the building. It's a business and regardless of how much you put in up front, as a founder, employee or investor, you need to keep producing for the company or you'll be excused from showing up any more.