

Legal basics for startups, complete DIY guide: Vesting - dsplatonov
http://blog.staply.co/do-it-yourself-guide-vesting

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gamblor956
I've said this before, and I'll say it again: people who are not lawyers
should not give legal advice because they usually get it wrong. (Yes, I know
that one of the Staply founders was a "legal counsel" in Finland. In most of
Europe, a law degree is a 2-year undergraduate degree and licensing
requirements are very permissive.)

This blog post is filled with legal mistakes, assuming it is intended to apply
to startups generally and not just Finnish startups. By the way--where's the
warning that this information doesn't apply outside of Finland?

If you want legal advice, at the very least get it from a blog from a licensed
lawyer practicing in your jurisdiction. Grellas, for example, has a very good
selection of articles. MoFo and other firms also provide legal templates
targeted at startups.

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wooster
I'm flagging this post because it contains bad advice.

For information on this topic from someone who actually knows what they're
doing, please read "An Introduction to Stock and Options" by David Weekly:

[http://www.amazon.com/Introduction-Stock-Options-David-
Weekl...](http://www.amazon.com/Introduction-Stock-Options-David-Weekly-
ebook/dp/B0055PQ4H8)

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dsplatonov
Please specify with what you disagree

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wooster
This isn't how vesting is typically set up for founders at a startup in the
US. You'd do well to read the eBook I linked to, as well as Grellas' series of
posts:
[http://www.grellas.com/faq_business_startup.html](http://www.grellas.com/faq_business_startup.html)
Pay particular attention to the stuff about 83(b) elections.

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mynewwork
Dumb question: what is the status of the un-owned (un-vested) portion of
shares in the first years?

Suppose two people, A and B, are equal partners each vesting towards 50%
ownership in 3 years. After the first year, they both have vested ownership of
16.6%, what is the status of the other 66% of the company? Does the
corporation as an entity own 66% of itself? Do they both really own 50% of the
company, with an agreement that new shares will be created in a year and
distributed to them? It seems to me like this scenario would mean they both
own 50% of shares outstanding, and each year new shares are created which
dilute their original holding's equity, but the shares then go to them (so
they initially hold ie 10,000 shares of 20,000, then later hold 20,000 of
40,000).

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gamblor956
Corporate ownership is determined by shares outstanding. Reserve shares
retained by the company do not figure into ownership calculations.

A company cannot directly own itself, but it can indirectly, if it contributes
some of its shares to another company that it wholly or partially owns. (This
is not permissible in all jurisdictions, such as the U.K.)

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gingerlime
I guess I lived in a cave for too long, but what is "Zuckerberg's case"
exactly?

~~~
tobinfricke
I wondered this too. From the link provided by dsplatonov:

"On founder equity (we couldn’t miss this one!): All founders must be on
vesting schedule. Mark heard nothing about vesting at the time when they
started the company. They just divided equity, and then his co-founder Eduardo
left."

