Startup Terms Glossary
What is Reverse Vesting?
Reverse vesting occurs when the co-founder of a company receives their shares in a company upfront. When shares are issued to a co-founder using reverse vesting, there are rules surrounding how many of the issued shares a company can repurchase in the event that the co-founder leaves the company.
Reverse Vesting Examples
Examples of reverse vesting:
- Example 1. Prevents co-founders from walking away early with a large amount of shares
- Example 2. Typically applies to 75% of co-founder’s shares
- Example 3. Protects investors by discouraging founders from separating from a startup
Here’s another web page about reverse vesting.
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