

What is a 5% non active equity stake? - Navarr

And what on earth does it mean to a code-monkey?
======
pg
I haven't heard that expression. I could guess, but you'd do best simply to
ask whoever's offering it to you what they mean by it.

------
PythonDeveloper
It means you don't get a board seat, and you probably get common, non-voting
stock.

Sadly, it probably comes WITHOUT an anti-dilution clause, meaning that any new
stock allocated will dilute your 5%. As a company progresses through its
capitalization phases, new stock is likely to be allocated, usually in new
classes that offer more protection to the investors, and less protection to
the "monkeys" like us.

Your "5%" will likely be converted to a number of shares at the time it is
executed, and that number of shares will likely NOT be 5% of the total number
of shares available when a liquidation event (IPO/Buyout) occurs.

~~~
RuchitGarg
"It means you don't get a board seat, and you probably get common, non-voting
stock." Most likely this is what it meant.

Although it might not be as bad as it sounds like in your explanation. I dont
think anti-dilution clause is common, but I may be wrong

~~~
RuchitGarg
and just to support my assumption here is thread on quora on anti-dilution
[http://www.quora.com/How-common-are-anti-dilution-clauses-
fo...](http://www.quora.com/How-common-are-anti-dilution-clauses-for-founders-
and-key-executives)?

