What is reverse vesting? Reverse vesting is when founders (or key employees) are granted shares upfront but only earn the right to keep them over time. If they leave before the vesting period ends, unvested shares are forfeited. For example, A founder gets 1,000 shares with a 4-year vesting period. After 2 years, they keep 500 shares; the remaining 500 are forfeited if they leave. How does it differ from traditional vesting? In traditional vesting, you earn equity over time, while in reverse vesting, you already own the shares upfront but risk losing them if you leave early. It ensures key members remain committed long-term, protecting the company and aligning interests.
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This is a super interesting framing of how to think about your advisory board as a founder. I have heard/read this concept from Jeff Becker a few times and have been excited to read a comprehensive breakdown of it in his newletter Monday Morning Meeting. I particularly love the idea of milestone-based equity vesting for advisors. I imagine this forces you to be very clear on what you need from each advisor, and having those goals met within a much shorter timeframe. https://lnkd.in/eqDEY6x7
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