
Ask HN: How to deal with a founder that won't leave his job (maybe)? - burgund
We&#x27;re 3 founders with an initial cap table of a) 40% - b) 30% - c) 30%. Founder c is working as a researcher and initially dedicates 15h per week to the project with the idea to go fulltime in the future. Founders a and b are working fulltime since day 1. 6 months in and he didn&#x27;t decide what to do yet. We&#x27;re preparing a funding round and we want to fix this before talking to investors. How would you deal with it? Founders a and b think this proposal is fair:<p><pre><code>    -Scenario 1. Founder c starts fulltime now and keeps his initial 30%.

    -Scenario 2. Founder c leaves the company and he keeps 3%.

    -Scenario 3. The situation continues the same but founder c shares will start decreasing now (month 6) until we reach month 18 to a minimum of 5%. For example, if he joins at month 10 he&#x27;d keep around 20%, at month 14 10%, at month 18 5%...
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Founder c thinks this is unfair.<p>Some considerations:<p><pre><code>    -Founder c is very good and we want him in.

    -Founder c has not take any salary from our company during this time and he&#x27;d continue working without salary in scenario 3.

    -All founders put the same small amount of money at the beginning.

    -Founders a and c have been working on the project for a long time as a side project (more than a year). Founder b joins the project later when the first pre-seed round is being cooked (hopefully this explains the initial shares)

    -This is not a fight, we&#x27;re close friends and we&#x27;re discussing this issue in a friendly way to get the best outcome for everyone and the company.
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We know we shouldn&#x27;t have gotten into this situation in the first place. We learned the lesson, but this is the situation right now and we&#x27;d like to get constructive answers. Thanks.
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wwalser
Does C actually control 30% of the legal entity (c-corp or LLC I assume), or
was the agreement an up front verbal commitment of 30%?

Is there a vesting schedule in place?

The most reasonable thing, I think, it to treat the situation as a well-formed
c-corp would. 30% of shares allocated but vesting over a four year period.
There's a one year cliff for 25% of allocated shares then 1/36th of remaining
shares per month for the next 36 months. Depending on when you consider the
venture to have started, six months ago when A and B went full time or when it
was a side project, C may have between 0 (because they haven't hit the one
year cliff) and 1 year and N months worth of shares (between 7.5% and 15%
ownership).

Based on what you've written, I assume that:

You don't want to completely wipe this person off the cap table by asserting
that they aren't legally entitled to anything because of not meeting their one
year cliff. However, You also don't feel that they should get 7.5-15%
ownership.

If both of those are true, it's a negotiation. Having two people whose entire
livelihood is dedicated to something but a third who is not but is earning
equity at the same rate sounds like the sort of thing that will only ratchet
up in pressure over time.

"Founder c thinks this is unfair." That's the most interesting thing that you
wrote. All of the options that you laid out seem reasonable given the
situation that's described.

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MollyR
All founders should be full-time to keep the incentives to drive the company
forward the same is what I've heard from a couple VC's I've talked too. They
also mentioned something called the golden handcuffs.

