How might exit and equity for look for stakeholders?

How might it work for: a)Team with low stake 1-2% that are staying b)Contractor from early days that was compensated with 1% equity c)Investors with small stake e.g. 1-2% Do they typically get half now, half later or do they get lot on sale?


Next time, get this stuff figured out at the start and written down in your Operating Agreement. The OA tells everyone what the agreements are on how things like this will be done.

You may be able to do that now, but it's going to be more challenging to get to consensus today. You're pretty much guaranteed someone is going to be unhappy with the results and that's going to cause trouble.

Minority shareholders have rights. Learn what those are.

You need to talk to an attorney and an accountant now and get their "professional advice." I am neither of those and this is not "professional advice."

Answered 6 years ago

If your agreement contains some vesting period or vesting date, they will get their stake in equity on said date or period and on conditions prescribed in the agreement but if there are no specific vesting terms then they will get their equity share on grant date which is the date on which share in equity was granted. If you are looking for an answer to how your stakeholders will be compensated on exit then the answer is that they will be compensated on the maturity of deal as per the percentage of equity they hold in business.

Answered 6 years ago

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