Should Founders Stock be subject to vesting?

When companies hire personnel and give them equity compensation as part of the package, usually founders are very careful to impose certain vesting structure to ensure that an employee will stay with a company and invest his/her resources for a certain period of time instead of leaving in a months with a big chunk of interest. When a group of people come up with an idea and decides to build a business based on it, the subject of vesting does not necessarily come up. Should it? Should Founders Stock be subject to vesting?   

There are two main points of views on this subject. Both have legitimate grounds. Some believe that those who invested their financial and intellectual capital, time, labor, and otherwise devoted themselves to the creation and development of the business from the very beginning, should fully and unconditionally own their share in it. On the other hand, we all agree that establishing a business is only the fist step. The success and further development of enterprise greatly depend on the work of all parties involved. The partners may not want anyone to leave a company shortly after its creation and still own a big chunk of interest in case business grows significantly due to no help from that person. The vesting may be a reasonable solution.

Also, we know that if investors get involved, they impose vesting on founders’ shares almost in 100% of the times before they put money on the table. When making a decision of whether to invest, investors review the team as much as they review the product/service/idea. They will surely put some mechanisms in place to ensure that some members of the team won’t cash out shortly after receiving the money or, even worse, will hold to their shares for a period of time and then come back for profits when the business is at its peak. If founders impose a reasonable vesting schedule on their shares, it may survive after investors come on board, which will allow avoiding re-writing company’s documents and incurring significant legal costs.

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