A second way of thinking, especially in continental Europe, is not satisfied with this “one size fits all” approach. It tries to distinguish between good and bad leavernes, and may even introduce additional categories for some “grey leavers”. For example, a vesting system in Germany might look like this: A clearly bad leaver loses all Vesting Shares, including vested shares. A Leaver voucher retains all the unshakable shares and loses only a portion of the und damaged shares or is compensated for the unr confiscated shares to be transferred. A “voluntary Leaver” may lose his or her steadfasient shares, but retain all or at least some of the insolvent shares, and a founder who resigns due to a serious illness may retain all the insolvent shares. In general, in agreements, we see 50% – 75% of a founder`s shares subject to unwaveringness, instead of the whole 100%. However, it is very different. Investors will argue that the purpose of the investment is to look forward and not backward, and that they are simply trying to keep the people who are essential to justify the valuation they are investing in. The counter-argument is that if the founders have been dislodging for some time, they have won most of the shares anyway. What salaries are founders entitled to (if any)? How can this be changed? With Avodocs, you can create and customize legal documents for your startup by asking yourself questions and creating a founding agreement based on your answers. You can get a free template here. When founders agree to restrictions on unshakability, it is usually to their advantage to submit a special tax choice, known as an election under Section 83(b). This is discussed in our article What is a “Section 83(b) Wahl” and why should I file one? While these principles are largely undisputed, the devil is in the details: the investment structure must strike a balance between the investor`s goals and the founders` legitimate interest in protecting their ideas and achievements.
The first thing to avoid is the assimilation of the conditions of the founding actions to those of a staff incentive program (“ESOP”). An ESOP, whether “real” shares, options or virtual shares, will usually have stricter conditions than the founding investment, because the shares or options granted to employees are, in almost all cases, exclusively for future work and have not already been earned to some extent.