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Sam, Thank you very much for sharing this. Two questions: 1) Without an option pool, how do you prevent founders from issuing more options to themselves? 2)
by timberlane 13y ago
Sam,
Thank you very much for sharing this. Two questions:
1) Without an option pool, how do you prevent founders from issuing more options to themselves?
2) On the other side, do the Participation rights include the right to purchase into the option pool when it is created? i.e. is creating the option pool a "offering of new securities".
- mikeyouse 13y agoI'm not Sam, but I have some insight; 1) The Board has to approve all new shares, so founders would have to go to a vote in order to give themselves a new chunk. 2) There won't be an option pool created. The participation clause is in relation to new rounds of funding. As new money comes on board, new shares will be added and the pro-rata participation means that Sam will be able to invest alongside the new round to maintain his percentage of ownership.
- sama 13y ago1) work with founders you trust? or, when there is a board, it'd have to be board-approved. 2) options pools are carved out of this.