Often the company has the first bite on the apple, then the founders or investors. The priority is negotiation. While these principles are largely unchallenged, the devil is in the details: the vesting structure must find a balance between the objectives of the investor and the legitimate interest of the founders in protecting their ideas and their achievements. First, the conditions for the founders` participation should be equated with those of a staff incentive program (“ESOP”). An ESOP, whether “real” shares, options or virtual shares, will generally have stricter conditions than the founding rights, since the thought actions or options granted to workers in almost all cases are considered counterparties for future work and have not already been earned to some extent. With regard to point 9, we should first reflect this difference by excluding a portion of The founders` shares of Vervestre. Depending on the time the founders have already worked on the company, we are pleased to release up to 25% of the foundation shares of the besieging in a seed round and perhaps more in a Series A financing (and there is an argument in favor of more forgiving vesting conditions, see below). At first glance, the individual trigger rule seems more favourable to the founders, but on closer inspection, the double-trigger approach has its advantages: it helps enormously in the sale of the business. Most buyers, even if they are strategic, will want to ensure a smooth transition and maintain existing management on board for at least some time. In some cases, the founders are even willing to forego a single agreed trigger for some of their non-unreasonable actions to complete the transaction. In return, they can even negotiate additional incentives with the buyer as an additional reward.
Investors generally accept it when the reward is within reasonable limits and there is no (hidden) incentive for the founders to defer the agreement to another. If you work in a high-tech field, it is possible that one of the founders played an important role in the development of this product. It has the right to be linked to its innovation, but all intellectual property rights should be held by the company and not by an individual. The innovator can be rewarded with higher capital if necessary, but once you form a business, everything belongs to the company and not to an individual. This will help you protect the organization if someone decides to come off. It should not claim the right to the product or develop a similar prototype with someone else. The company will award the founders all the objects of the non-recourse deduction; provided that a founder`s non-recourse deductions are specifically allocated, for one year or another period, to the founder who bears the risk of economic loss related to the non-recourse debt on which that partner is not likely to re-deduct.