Founder Vesting

In founder vesting, the founders of seed and early stage deals are subjected to a vesting schedule of their shares ownership, with nothing upfront and a linear vesting of typically over four years. For the first 12 months, the ownership is considered "cliff", and the succeeding years would have monthly vesting thereafter. For more mature companies, vesting credit can be applied at the the time of investment, wherein minimum service credit is required to qualify. Founder vesting thereby protects investors from an early, unplanned exit by the founder, while similarly providing investors with the equity necessary to attract a new management team.

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