A lot’s been going on over at BuzzPal these past couple of months. Besides design and development work, we’re growing the team, forming a new company, negotiating terms, drafting documents, and generally working through all the administrative stuff you gotta do to get a clean start.
One of the questions everybody goes through at this point is: “Who should get how much equity and under what terms and conditions and vesting”? Yokum’s article (below) is about that “vesting” part (other parts to be discussed some below).
Yokum suggests standard 4-year vesting with a 1-year cliff, then equal monthly vesting. It’s hard to argue with that. Indeed, it’s what I got at MCG (I got options that where converted to restricted stock before our IPO in 2001) and it’s most people get if and when they get equity.
“[T]he most fair and equitable structure, and the one that maximizes the alignment between the founders and the investors, is to vest like this: