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What Happens If I Die?!

(this post is a feed post from my comments on reddit)

r/business

As the original founder; especially if the business already has revenues and profits your ownership should be fairly certain so at the very least I would push for at least a portion of my shares to be fully vested to begin with.
It’s actually a bit weird because that kind of 4 year vesting 1 year cliff I typically only see with new members to a team not the original founders.

Think of it this way, you already own 100% of the business, it’s profitable; but getting an investor inat this stage you are effectively selling the investor a % in the business; additionally you will be awarding the cofounder a % for his joining

So for the cofounder the 4year+1cliff is a way to lock in commitment

For the investor, they would typically be looking for some assurances you won’t leave- which if your equity is large enough will already be sufficient.

Anyways, you can negotiate this.

But as another commenter said, double check with a lawyer, and if you’re friendly with the seed investor you can explain your concerns and have them offer alternate terms or add provisions into the agreement.

Don’t be worried it seems like a really big thing you’re dealing with, but really it’s a common part of the process, you just need to be practical and methodical

What Happens If I Die?!
byu/koiphish inbusiness

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