Startup Founding Agreement - Who gets unvested shares in the event of Founder leave?
As the title states, really curious how other founders have handled this.
Assuming a founder leaves in year 1 or 2 with significant unvested shares, should this equity flow to individuals (like the CEO/CTO) first or be equally available to the founding team or core equity holders?
We haven't tested it out yet (fingers crossed), but we said that it will:
A) Be distributed among organizations (not physical persons) according to their existing %. For example, my co-founder and me are from the same organization. If we have a founding team with 70% equity, 70% of distributed unvested shares would go to the founding team, independently of how many stakeholders make up that organization.
B) For A) to happen, there has to be a simple majority vote in the board. If there's no interest in absorbing those shares, they will be used to raise more capital.