While negotiating share buybacks with departing team members can be challenging, successful buybacks often benefit the company's long-term health by preventing "dead equity" from accumulating in the cap table. It's crucial for startups to make good-faith efforts to buy back or rationalize ownership stakes from departing founders, executives, advisors, and early team members, as having significant portions of dead equity can harm both the company and its active contributors.
Brilliant. I just had this very conversation with some folks facing this very problem. I’m of the opinion that founder equity should not be immediately granted, but earned over time, which helps ease (but doesn’t completely eliminate) the problem you address.
Brilliant. I just had this very conversation with some folks facing this very problem. I’m of the opinion that founder equity should not be immediately granted, but earned over time, which helps ease (but doesn’t completely eliminate) the problem you address.
Love this!
Very interesting