

The New Deal – A Founding CEOs Value is Non Linear - enra
http://steveblank.com/2010/07/19/the-new-deal-%E2%80%93-a-founders-value-is-non-linear/

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rdl
It seems like it is worth the goodwill and ongoing non-CEO involvement of a
founder to keep him on in a role other than CEO after being replaced (if
necessary) in year 3-5.

There are still plenty of issues of ego, direction, etc. where a founder might
be upset about being replaced in the CEO role, but an effective founding CEO
who isn't a perfect late-stage startup CEO shouldn't be replaced just to claw
back equity.

Issuing one set of stock to the founders for "being founders", and another set
for initial roles, might be a good solution. I'd be happy with 20-25% as a
founder, plus 5-10% more (market rate at the next stage of financing,
equivalent) as founding CEO. Both sets would vest, but if replaced as CEO
before the CEO grant fully vests, it wouldn't affect the founder grant.

For additional control, you could issue some or most or all of the "founder"
shares as Series FF, with the role shares as standard employee shares.

