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Startups & Venture Capital

Founder Vesting

Also called: founder shares vesting, reverse vesting, four year vest

Founder vesting subjects founders' own shares to a vesting schedule, typically four years with a one-year cliff, so someone who leaves early doesn't keep a large stake for a short contribution. Investors insist on it and experienced founders want it, because the alternative is a departed co-founder holding 30% of a company they no longer help build — a defect that makes the next round very hard to raise.

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