Startup Legal Document & Equity Management SaaS
The post highlights a common 'rookie error' in startups: neglecting proper founder agreements and equity vesting. This indicates a significant pain point for early-stage entrepreneurs who lack legal expertise or budget for extensive legal counsel. A SaaS solution could streamline the process of generating, managing, and understanding critical startup legal documents (e.g., founder agreements, vesting schedules, IP assignments, NDAs). The product could offer customizable templates, automated document generation based on user input, version control, reminders for vesting milestones, and potentially integration with e-signature tools. This helps startups ensure legal compliance and avoid future disputes, enabling them to focus on growth. Revenue could be generated through tiered subscriptions based on features, number of documents, or team size, ranging from $50-$500 per month per startup.
Origin Reddit Post
r/startups
Stepping back as co-founder after 5 years, should I give up vested equity? I will not promote
Posted by u/YoEatThis•07/30/2025
Co-founded a UK startup five years ago with an old friend. Initially we were 50/50 equity partners but didn't include any vesting agreements in our founders agreement (rookie error, I now kno
Top Comments
u/Mysterious_Plant5477
Why only to him you have worked hard on it if he was giving you proper amount of the company valuation otherwise he was just doing smartness so he get more control over company and you get du
u/vreo
Have him buy you out. Was in a similar situation. You have 25%, after the investment rounds, your company's worth should be known, so your price is no guesswork. Or offer your 25% to one of
u/Jesuce1poulpe
Absolutely do not give up half your equity. This is not normal, fair, or "the right thing to do", it's your business partner taking advantage of your exhaustion and guilt.
Your partner sees
u/zaskar
I read up to the in or out statement.
He can buy your 50% for 50% of the valuation performed by a 3rd party. Or you can sell your stake to someone else. Nothing in your earned equity is thei
u/Westernleaning
First off he buys your equity you don’t give it. Wtf is this hippie stuff doing in here. You built a business together not a collective commune. New COO can be issued new equity, it will be e
u/bboymarko
Do not give it up. I've had to buy out a 50% shareholder who basically ended up doing no work and causing loads of issues. It's a bitter pill but you honor a shareholding.
u/n1njal1c1ous
Vested is vested tell him to GTFO. I didn’t even read what you wrote, vested is vested.
u/Remote_Volume_3609
You tell him that his incentive to "continue the project" is the part where he owns 40% of the damn company lol. And the damn salary he literally gets. I would point out that if him owning 40
u/Therealmesf
Who owns the other 35%? Ask them if they want to buy your shares.
u/Ficologo
Are you talking 6 figures?
u/DDayDawg
If you had vested it would have been on a 4 year schedule most likely. You earned those shares. No way I would hand majority control to a single individual in a company I helped create. That
u/haux_haux
Agree.
The deal is not a fair deal unless there are other parts to this that the OP hasn't disclosed.
u/bboymarko
Do not give it up. I've had to buy out a 50% shareholder who basically ended up doing no work and causing loads of issues. It's a bitter pill but you honor a shareholding.
u/already_tomorrow
You're being forced/bullied out by him wanting to take over the business.
Think of your equity similar as salary paid to you. It's for your work already done. That's why you have it. Would y
u/toolate
Who is paying this mediator? It sounds like this person is working in the best interests of your cofounder, and is not an impartial third party.
The fact that you’re even asking if this pro
u/realmenus
Yeah. Don’t forget to add a nice premium OP. The audacity to even propose this
u/n1njal1c1ous
Vested is vested tell him to GTFO. I didn’t even read what you wrote, vested is vested.
u/zhamdi
I would compute his salary difference that made him capable of owning 40% of the company while you own only 25. I find it pretty unjust to start with a 50/50 and end up almost having the doub
u/AgileDepartment3686
Yeah I imagine it does - worth looking at the Shareholders Agreement ESS Plan Rules as well and seeing if there is a mechanism for equity buy backs.
u/Ambitious_Car_7118
You’re stepping back, not disappearing. And your equity reflects five years of real contribution, not future promises. There’s no legal or ethical obligation to hand over vested shares unless
u/thumbsmoke
What did you end up doing?
u/DDayDawg
If you had vested it would have been on a 4 year schedule most likely. You earned those shares. No way I would hand majority control to a single individual in a company I helped create. That
u/shitty_marketing_guy
This poster is 100% right. Was looking to see if someone has said it for me and here it is
u/Lucky-Ride9651
Why will you continue handling basic tasks? Unless you get a salary to do it it's not fair, you don't work for free and you earned your shares already so just keep them.
The best here w
u/zhamdi
I would compute his salary difference that made him capable of owning 40% of the company while you own only 25. I find it pretty unjust to start with a 50/50 and end up almost having the doub
u/quakerlaw
Fuck no. Even if you had included vesting at formation, your equity would have fully vested long ago. That stock is yours. They can buy you out at full value, or fuck off.
u/Therealmesf
Who owns the other 35%? Ask them if they want to buy your shares.
u/vreo
Have him buy you out. Was in a similar situation. You have 25%, after the investment rounds, your company's worth should be known, so your price is no guesswork. Or offer your 25% to one of
u/Sufficient_Ad_3495
Hold on to your shares if you feel the company is going places... simple... do not be pushed out of your hard work. Thats yours regardless.... If further investment is planned wait till then
u/theredhype
It occurs to me that acquiring half of your equity would put him at 52.5% and I wonder if there is some motivation around control that is driving him.
In any case, I agree with _literally e
u/SurftoSierras
This is a fair risk, though if he owns 25% and partner has 40%, who has the rest and will they accept a dilution as well?
Lots of games can be played, however.
u/phoenix823
>feels it's appropriate for me to give over 50% of my equity to him over the course of the next 4 years to 'incentivise' him to continue the project in my absence
Lmfao what is YOUR incen
u/AgileDepartment3686
Yeah I imagine it does - worth looking at the Shareholders Agreement ESS Plan Rules as well and seeing if there is a mechanism for equity buy backs.
u/theredhype
It occurs to me that acquiring half of your equity would put him at 52.5% and I wonder if there is some motivation around control that is driving him.
In any case, I agree with _literally e
u/Dry_War_747
As others have stated, ask for a buyout or get an attorney to put together an agreement. Definitely a rookie move but it’s not irreparable.
u/Bunnylove3047
Your partner is hurt that you are prepared to offer shares to new person and not hand them to him. 😂😂 Maybe you should tell him that you’ll happily hand them over to him when he buys them.
u/KindDoctor4142
This doesn't sit right with me either, especially after 5 years of building, leading sales, and taking reduced pay. If anything, offering equity to future hires makes more sense than handing
u/already_tomorrow
You're being forced/bullied out by him wanting to take over the business.
Think of your equity similar as salary paid to you. It's for your work already done. That's why you have it. Would y
u/theredhype
It occurs to me that acquiring half of your equity would put him at 52.5% and I wonder if there is some motivation around control that is driving him.
In any case, I agree with _literally e
u/Remote_Volume_3609
You tell him that his incentive to "continue the project" is the part where he owns 40% of the damn company lol. And the damn salary he literally gets. I would point out that if him owning 40
u/beliefinphilosophy
Your cofounder has an ego problem and doesn't recognize the value of soft skills. He likely believes that "sales is easy anyone can do it" and "the product sells itself"
He fails to recogni
u/julkopki
Lack of vesting agreements is a problem for him, not for you. He basically needs to buy you out or you keep it. If you wish to be a good player you can give him a reasonable price and not try
u/Jesuce1poulpe
Absolutely do not give up half your equity. This is not normal, fair, or "the right thing to do", it's your business partner taking advantage of your exhaustion and guilt.
Your partner sees
u/phoenix823
>feels it's appropriate for me to give over 50% of my equity to him over the course of the next 4 years to 'incentivise' him to continue the project in my absence
Lmfao what is YOUR incen
u/thumbsmoke
What did you end up doing?
u/FartyFingers
A dilution with no other financial rational, and one where he dilutes you, but not himself, is opening the doors wide to the easiest civil suit imaginable. Not some long expensive courtroom d
u/Mysterious_Plant5477
Why only to him you have worked hard on it if he was giving you proper amount of the company valuation otherwise he was just doing smartness so he get more control over company and you get du
u/akicroz8
Dude stop. Don’t hand over your shares. It’s your property.
Do what feels fair to you. Don’t listen to the non entrepreneurs that tell you to maximise everything. You know what would be fair
u/zedmaxx
Yes and this is the correct approach
Do not give up earned equity for nothing.
u/edkang99
Sorry to hear this. I’ve been similar situations. I’ll tell you what my mentor told me.
Your first obligation is to honor yourself, then honor others. (Everybody else will want it the other
u/TheBonnomiAgency
> it has been suggested that handing over half of my vested shares to my business partner is the 'right' thing to do
LOL, by your partner directly or by the mediator he hired? Lawyer up,
u/Bunnylove3047
Your partner is hurt that you are prepared to offer shares to new person and not hand them to him. 😂😂 Maybe you should tell him that you’ll happily hand them over to him when he buys them.
u/DDayDawg
If you had vested it would have been on a 4 year schedule most likely. You earned those shares. No way I would hand majority control to a single individual in a company I helped create. That
u/already_tomorrow
You're being forced/bullied out by him wanting to take over the business.
Think of your equity similar as salary paid to you. It's for your work already done. That's why you have it. Would y
u/thatwas90sfun
What is the company worth? That’s probably the most critical part of the discussion.
u/thumbsmoke
What did you end up doing?
u/shitty_marketing_guy
This poster is 100% right. Was looking to see if someone has said it for me and here it is
u/thatwas90sfun
What is the company worth? That’s probably the most critical part of the discussion.
u/Fun_Hornet_9129
Highest bidder, then if the partner wants to pay at minimum that amount then fine.
u/DuskLab
Who selected this mediator? That person suggested this or your co-founder did?
u/twinshk2
I would say the guy is bluffing. He will not leave over 12.5% if he owns 40%. I also think there is no reason for you to give over earned equity - the guy will continue with 40% - if it's ear
u/OriginalFluff
This sounds stupid. He either buys you out or you keep the equity. 5 years is a long fucking time.
u/SurftoSierras
This is a fair risk, though if he owns 25% and partner has 40%, who has the rest and will they accept a dilution as well?
Lots of games can be played, however.
u/zaskar
I read up to the in or out statement.
He can buy your 50% for 50% of the valuation performed by a 3rd party. Or you can sell your stake to someone else. Nothing in your earned equity is thei
u/Ambitious_Car_7118
You’re stepping back, not disappearing. And your equity reflects five years of real contribution, not future promises. There’s no legal or ethical obligation to hand over vested shares unless
u/IntolerantModerate
Do NOT under any circumstance give up your equity. That is money you have earned. Even with a 4 year vest it would all be yours.
If they want it, they can make you an offer for it.
u/tgage4321
You gave 5 years for this man, standard vesting is like 4 years. Giving up half your equity seems unreasonable to me.
u/edkang99
Sorry to hear this. I’ve been similar situations. I’ll tell you what my mentor told me.
Your first obligation is to honor yourself, then honor others. (Everybody else will want it the other
u/twinshk2
I would say the guy is bluffing. He will not leave over 12.5% if he owns 40%. I also think there is no reason for you to give over earned equity - the guy will continue with 40% - if it's ear
u/cubej333
Shouldn’t he buy you out?
u/Remote_Volume_3609
You tell him that his incentive to "continue the project" is the part where he owns 40% of the damn company lol. And the damn salary he literally gets. I would point out that if him owning 40
u/Jasperbeardly11
Yeah don't accept this.
u/tgage4321
You gave 5 years for this man, standard vesting is like 4 years. Giving up half your equity seems unreasonable to me.
u/cubej333
Shouldn’t he buy you out?
u/thatwas90sfun
What is the company worth? That’s probably the most critical part of the discussion.
u/Sufficient_Ad_3495
Hold on to your shares if you feel the company is going places... simple... do not be pushed out of your hard work. Thats yours regardless.... If further investment is planned wait till then
u/Jasperbeardly11
Yeah don't accept this.
u/realmenus
What kind of partner asks for free equity after you put in 5 years of work? That alone should have you questioning his character. And the mediator’s too. Tell them to go pound sand.
u/cubej333
Shouldn’t he buy you out?
u/Ficologo
Are you talking 6 figures?
u/already_tomorrow
You're being forced/bullied out by him wanting to take over the business.
Think of your equity similar as salary paid to you. It's for your work already done. That's why you have it. Would y
u/beliefinphilosophy
Your cofounder has an ego problem and doesn't recognize the value of soft skills. He likely believes that "sales is easy anyone can do it" and "the product sells itself"
He fails to recogni
u/shitty_marketing_guy
This poster is 100% right. Was looking to see if someone has said it for me and here it is
u/realmenus
Yeah. Don’t forget to add a nice premium OP. The audacity to even propose this
u/tgage4321
You gave 5 years for this man, standard vesting is like 4 years. Giving up half your equity seems unreasonable to me.
u/quakerlaw
Fuck no. Even if you had included vesting at formation, your equity would have fully vested long ago. That stock is yours. They can buy you out at full value, or fuck off.
u/zaskar
I read up to the in or out statement.
He can buy your 50% for 50% of the valuation performed by a 3rd party. Or you can sell your stake to someone else. Nothing in your earned equity is thei
u/FartyFingers
A dilution with no other financial rational, and one where he dilutes you, but not himself, is opening the doors wide to the easiest civil suit imaginable. Not some long expensive courtroom d
u/vreo
Have him buy you out. Was in a similar situation. You have 25%, after the investment rounds, your company's worth should be known, so your price is no guesswork. Or offer your 25% to one of
u/zedmaxx
Yes and this is the correct approach
Do not give up earned equity for nothing.
u/Dry_War_747
As others have stated, ask for a buyout or get an attorney to put together an agreement. Definitely a rookie move but it’s not irreparable.
u/KindDoctor4142
This doesn't sit right with me either, especially after 5 years of building, leading sales, and taking reduced pay. If anything, offering equity to future hires makes more sense than handing
u/vreo
Have him buy you out. Was in a similar situation. You have 25%, after the investment rounds, your company's worth should be known, so your price is no guesswork. Or offer your 25% to one of
u/Kghaffari_Waves
Vesting is 4 years normally. You'd have the equity.
u/feudalle
Its a divorce without a prenuptial. Give some of the shares back, dont give any back, up to you. Here is the kink though, if you have no written agreement what stops your partner from dilutin
u/Therealmesf
Who owns the other 35%? Ask them if they want to buy your shares.
u/realmenus
What kind of partner asks for free equity after you put in 5 years of work? That alone should have you questioning his character. And the mediator’s too. Tell them to go pound sand.
u/toolate
Who is paying this mediator? It sounds like this person is working in the best interests of your cofounder, and is not an impartial third party.
The fact that you’re even asking if this pro
u/zhamdi
I would compute his salary difference that made him capable of owning 40% of the company while you own only 25. I find it pretty unjust to start with a 50/50 and end up almost having the doub
u/bboymarko
Do not give it up. I've had to buy out a 50% shareholder who basically ended up doing no work and causing loads of issues. It's a bitter pill but you honor a shareholding.
u/SurftoSierras
This is a fair risk, though if he owns 25% and partner has 40%, who has the rest and will they accept a dilution as well?
Lots of games can be played, however.
u/Kghaffari_Waves
Vesting is 4 years normally. You'd have the equity.
u/Jesuce1poulpe
Absolutely do not give up half your equity. This is not normal, fair, or "the right thing to do", it's your business partner taking advantage of your exhaustion and guilt.
Your partner sees
u/bboymarko
Do not give it up. I've had to buy out a 50% shareholder who basically ended up doing no work and causing loads of issues. It's a bitter pill but you honor a shareholding.
u/realmenus
What kind of partner asks for free equity after you put in 5 years of work? That alone should have you questioning his character. And the mediator’s too. Tell them to go pound sand.
u/AgileDepartment3686
Yeah I imagine it does - worth looking at the Shareholders Agreement ESS Plan Rules as well and seeing if there is a mechanism for equity buy backs.
u/Westernleaning
First off he buys your equity you don’t give it. Wtf is this hippie stuff doing in here. You built a business together not a collective commune. New COO can be issued new equity, it will be e
u/dumbfoundded
He definitely would have vested over any sort of standard timeline.
u/Dry_War_747
As others have stated, ask for a buyout or get an attorney to put together an agreement. Definitely a rookie move but it’s not irreparable.
u/Therealmesf
Who owns the other 35%? Ask them if they want to buy your shares.
u/zhamdi
I would compute his salary difference that made him capable of owning 40% of the company while you own only 25. I find it pretty unjust to start with a 50/50 and end up almost having the doub
u/FartyFingers
A dilution with no other financial rational, and one where he dilutes you, but not himself, is opening the doors wide to the easiest civil suit imaginable. Not some long expensive courtroom d
u/quakerlaw
Fuck no. Even if you had included vesting at formation, your equity would have fully vested long ago. That stock is yours. They can buy you out at full value, or fuck off.
u/Westernleaning
First off he buys your equity you don’t give it. Wtf is this hippie stuff doing in here. You built a business together not a collective commune. New COO can be issued new equity, it will be e
u/KindDoctor4142
This doesn't sit right with me either, especially after 5 years of building, leading sales, and taking reduced pay. If anything, offering equity to future hires makes more sense than handing
u/g15mouse
The equity is already yours to do with as you wish. If you want to donate it to your cofounder that is your prerogative, though I bet 95% of people wouldn't in this situation.
If he needs y
u/julian88888888
25% kinda kills the company so find a way to give up whatever % you can at whatever the company can afford. 25% of 0 is 0.
u/julkopki
Lack of vesting agreements is a problem for him, not for you. He basically needs to buy you out or you keep it. If you wish to be a good player you can give him a reasonable price and not try
u/OriginalFluff
This sounds stupid. He either buys you out or you keep the equity. 5 years is a long fucking time.
u/TheBonnomiAgency
> it has been suggested that handing over half of my vested shares to my business partner is the 'right' thing to do
LOL, by your partner directly or by the mediator he hired? Lawyer up,
u/feudalle
Its a divorce without a prenuptial. Give some of the shares back, dont give any back, up to you. Here is the kink though, if you have no written agreement what stops your partner from dilutin
u/Kghaffari_Waves
Vesting is 4 years normally. You'd have the equity.
u/realmenus
Yeah. Don’t forget to add a nice premium OP. The audacity to even propose this
u/Ambitious_Car_7118
You’re stepping back, not disappearing. And your equity reflects five years of real contribution, not future promises. There’s no legal or ethical obligation to hand over vested shares unless
u/Jesuce1poulpe
Absolutely do not give up half your equity. This is not normal, fair, or "the right thing to do", it's your business partner taking advantage of your exhaustion and guilt.
Your partner sees
u/dumbfoundded
He definitely would have vested over any sort of standard timeline.
u/twinshk2
I would say the guy is bluffing. He will not leave over 12.5% if he owns 40%. I also think there is no reason for you to give over earned equity - the guy will continue with 40% - if it's ear
u/zedmaxx
Yes and this is the correct approach
Do not give up earned equity for nothing.
u/Dry_War_747
As others have stated, ask for a buyout or get an attorney to put together an agreement. Definitely a rookie move but it’s not irreparable.
u/DDayDawg
If you had vested it would have been on a 4 year schedule most likely. You earned those shares. No way I would hand majority control to a single individual in a company I helped create. That
u/IntolerantModerate
Do NOT under any circumstance give up your equity. That is money you have earned. Even with a 4 year vest it would all be yours.
If they want it, they can make you an offer for it.
u/FartyFingers
If you bought IBM shares in 1935, you still own IBM shares. They don't fade away because you haven't contributed anything to IBM since 1935.
If he wants your shares, he can buy them. If he w
u/akicroz8
Dude stop. Don’t hand over your shares. It’s your property.
Do what feels fair to you. Don’t listen to the non entrepreneurs that tell you to maximise everything. You know what would be fair
u/g15mouse
The equity is already yours to do with as you wish. If you want to donate it to your cofounder that is your prerogative, though I bet 95% of people wouldn't in this situation.
If he needs y
u/g15mouse
The equity is already yours to do with as you wish. If you want to donate it to your cofounder that is your prerogative, though I bet 95% of people wouldn't in this situation.
If he needs y
u/zaskar
I read up to the in or out statement.
He can buy your 50% for 50% of the valuation performed by a 3rd party. Or you can sell your stake to someone else. Nothing in your earned equity is thei
u/Lucky-Ride9651
Why will you continue handling basic tasks? Unless you get a salary to do it it's not fair, you don't work for free and you earned your shares already so just keep them.
The best here w
u/julkopki
Lack of vesting agreements is a problem for him, not for you. He basically needs to buy you out or you keep it. If you wish to be a good player you can give him a reasonable price and not try
u/Ficologo
Are you talking 6 figures?
u/beliefinphilosophy
Your cofounder has an ego problem and doesn't recognize the value of soft skills. He likely believes that "sales is easy anyone can do it" and "the product sells itself"
He fails to recogni
u/Jasperbeardly11
Yeah don't accept this.
u/saschinvestor
Thanks for this. OP!!!^
No real friend would honestly ask you to do something like this. This person is greedy and should be avoided.
u/quakerlaw
Fuck no. Even if you had included vesting at formation, your equity would have fully vested long ago. That stock is yours. They can buy you out at full value, or fuck off.
u/IntolerantModerate
Do NOT under any circumstance give up your equity. That is money you have earned. Even with a 4 year vest it would all be yours.
If they want it, they can make you an offer for it.
u/Fun_Hornet_9129
Highest bidder, then if the partner wants to pay at minimum that amount then fine.
u/IntolerantModerate
Do NOT under any circumstance give up your equity. That is money you have earned. Even with a 4 year vest it would all be yours.
If they want it, they can make you an offer for it.
u/saschinvestor
He should also be handled as such (greedy).
u/n1njal1c1ous
Vested is vested tell him to GTFO. I didn’t even read what you wrote, vested is vested.
u/DuskLab
Who selected this mediator? That person suggested this or your co-founder did?
u/dumbfoundded
He definitely would have vested over any sort of standard timeline.
u/haux_haux
Agree.
The deal is not a fair deal unless there are other parts to this that the OP hasn't disclosed.
u/julian88888888
25% kinda kills the company so find a way to give up whatever % you can at whatever the company can afford. 25% of 0 is 0.
u/dumbfoundded
He definitely would have vested over any sort of standard timeline.
u/n1njal1c1ous
Vested is vested tell him to GTFO. I didn’t even read what you wrote, vested is vested.
u/Jaydgaitin
Absolutely not. If he wants your equity he needs to buy it. Or you guys need to sell the company. He’s trying to strong arm you. You really think he’d just stop running it because you didn’t
u/OriginalFluff
This sounds stupid. He either buys you out or you keep the equity. 5 years is a long fucking time.
u/Fun_Hornet_9129
Highest bidder, then if the partner wants to pay at minimum that amount then fine.
u/Sufficient_Ad_3495
Hold on to your shares if you feel the company is going places... simple... do not be pushed out of your hard work. Thats yours regardless.... If further investment is planned wait till then
u/g15mouse
The equity is already yours to do with as you wish. If you want to donate it to your cofounder that is your prerogative, though I bet 95% of people wouldn't in this situation.
If he needs y
u/tgage4321
You gave 5 years for this man, standard vesting is like 4 years. Giving up half your equity seems unreasonable to me.
u/DDayDawg
If you had vested it would have been on a 4 year schedule most likely. You earned those shares. No way I would hand majority control to a single individual in a company I helped create. That
u/Bunnylove3047
Your partner is hurt that you are prepared to offer shares to new person and not hand them to him. 😂😂 Maybe you should tell him that you’ll happily hand them over to him when he buys them.
u/mikedmoyer
There is a way to calculate EXACTLY how much equity you should each have. It's called the Slicing Pie formula. It is based on facts on logic and you can learn all about it at www.slicingpie.c
u/twinshk2
I would say the guy is bluffing. He will not leave over 12.5% if he owns 40%. I also think there is no reason for you to give over earned equity - the guy will continue with 40% - if it's ear
u/realmenus
What kind of partner asks for free equity after you put in 5 years of work? That alone should have you questioning his character. And the mediator’s too. Tell them to go pound sand.
u/thatwas90sfun
What is the company worth? That’s probably the most critical part of the discussion.
u/akicroz8
Dude stop. Don’t hand over your shares. It’s your property.
Do what feels fair to you. Don’t listen to the non entrepreneurs that tell you to maximise everything. You know what would be fair
u/mikedmoyer
There is a way to calculate EXACTLY how much equity you should each have. It's called the Slicing Pie formula. It is based on facts on logic and you can learn all about it at www.slicingpie.c
u/feudalle
Its a divorce without a prenuptial. Give some of the shares back, dont give any back, up to you. Here is the kink though, if you have no written agreement what stops your partner from dilutin
u/FartyFingers
If you bought IBM shares in 1935, you still own IBM shares. They don't fade away because you haven't contributed anything to IBM since 1935.
If he wants your shares, he can buy them. If he w
u/zedmaxx
Yes and this is the correct approach
Do not give up earned equity for nothing.
u/thatwas90sfun
What is the company worth? That’s probably the most critical part of the discussion.
u/phoenix823
>feels it's appropriate for me to give over 50% of my equity to him over the course of the next 4 years to 'incentivise' him to continue the project in my absence
Lmfao what is YOUR incen
u/Mysterious_Plant5477
Why only to him you have worked hard on it if he was giving you proper amount of the company valuation otherwise he was just doing smartness so he get more control over company and you get du
u/TheBonnomiAgency
> it has been suggested that handing over half of my vested shares to my business partner is the 'right' thing to do
LOL, by your partner directly or by the mediator he hired? Lawyer up,
u/shitty_marketing_guy
This poster is 100% right. Was looking to see if someone has said it for me and here it is
u/OriginalFluff
This sounds stupid. He either buys you out or you keep the equity. 5 years is a long fucking time.
u/SurftoSierras
This is a fair risk, though if he owns 25% and partner has 40%, who has the rest and will they accept a dilution as well?
Lots of games can be played, however.
u/Ficologo
Are you talking 6 figures?
u/Lucky-Ride9651
Why will you continue handling basic tasks? Unless you get a salary to do it it's not fair, you don't work for free and you earned your shares already so just keep them.
The best here w
u/Ambitious_Car_7118
You’re stepping back, not disappearing. And your equity reflects five years of real contribution, not future promises. There’s no legal or ethical obligation to hand over vested shares unless
u/Bunnylove3047
Your partner is hurt that you are prepared to offer shares to new person and not hand them to him. 😂😂 Maybe you should tell him that you’ll happily hand them over to him when he buys them.
u/tgage4321
You gave 5 years for this man, standard vesting is like 4 years. Giving up half your equity seems unreasonable to me.
u/julkopki
Lack of vesting agreements is a problem for him, not for you. He basically needs to buy you out or you keep it. If you wish to be a good player you can give him a reasonable price and not try
u/Sufficient_Ad_3495
Hold on to your shares if you feel the company is going places... simple... do not be pushed out of your hard work. Thats yours regardless.... If further investment is planned wait till then
u/Fun_Hornet_9129
Highest bidder, then if the partner wants to pay at minimum that amount then fine.
u/haux_haux
Agree.
The deal is not a fair deal unless there are other parts to this that the OP hasn't disclosed.
u/FartyFingers
A dilution with no other financial rational, and one where he dilutes you, but not himself, is opening the doors wide to the easiest civil suit imaginable. Not some long expensive courtroom d
u/haux_haux
Agree.
The deal is not a fair deal unless there are other parts to this that the OP hasn't disclosed.
u/mikedmoyer
There is a way to calculate EXACTLY how much equity you should each have. It's called the Slicing Pie formula. It is based on facts on logic and you can learn all about it at www.slicingpie.c
u/edkang99
Sorry to hear this. I’ve been similar situations. I’ll tell you what my mentor told me.
Your first obligation is to honor yourself, then honor others. (Everybody else will want it the other
u/Westernleaning
First off he buys your equity you don’t give it. Wtf is this hippie stuff doing in here. You built a business together not a collective commune. New COO can be issued new equity, it will be e
u/TheBonnomiAgency
> it has been suggested that handing over half of my vested shares to my business partner is the 'right' thing to do
LOL, by your partner directly or by the mediator he hired? Lawyer up,
u/OriginalFluff
This sounds stupid. He either buys you out or you keep the equity. 5 years is a long fucking time.
u/toolate
Who is paying this mediator? It sounds like this person is working in the best interests of your cofounder, and is not an impartial third party.
The fact that you’re even asking if this pro
u/IntolerantModerate
Do NOT under any circumstance give up your equity. That is money you have earned. Even with a 4 year vest it would all be yours.
If they want it, they can make you an offer for it.
u/Mysterious_Plant5477
Why only to him you have worked hard on it if he was giving you proper amount of the company valuation otherwise he was just doing smartness so he get more control over company and you get du
u/edkang99
Sorry to hear this. I’ve been similar situations. I’ll tell you what my mentor told me.
Your first obligation is to honor yourself, then honor others. (Everybody else will want it the other
u/cubej333
Shouldn’t he buy you out?
u/feudalle
Its a divorce without a prenuptial. Give some of the shares back, dont give any back, up to you. Here is the kink though, if you have no written agreement what stops your partner from dilutin
u/cubej333
Shouldn’t he buy you out?
u/DuskLab
Who selected this mediator? That person suggested this or your co-founder did?
u/FartyFingers
If you bought IBM shares in 1935, you still own IBM shares. They don't fade away because you haven't contributed anything to IBM since 1935.
If he wants your shares, he can buy them. If he w
u/Kghaffari_Waves
Vesting is 4 years normally. You'd have the equity.
u/akicroz8
Dude stop. Don’t hand over your shares. It’s your property.
Do what feels fair to you. Don’t listen to the non entrepreneurs that tell you to maximise everything. You know what would be fair
u/phoenix823
>feels it's appropriate for me to give over 50% of my equity to him over the course of the next 4 years to 'incentivise' him to continue the project in my absence
Lmfao what is YOUR incen
u/julian88888888
25% kinda kills the company so find a way to give up whatever % you can at whatever the company can afford. 25% of 0 is 0.
u/DuskLab
Who selected this mediator? That person suggested this or your co-founder did?
u/mikedmoyer
There is a way to calculate EXACTLY how much equity you should each have. It's called the Slicing Pie formula. It is based on facts on logic and you can learn all about it at www.slicingpie.c
u/Lucky-Ride9651
Why will you continue handling basic tasks? Unless you get a salary to do it it's not fair, you don't work for free and you earned your shares already so just keep them.
The best here w
u/toolate
Who is paying this mediator? It sounds like this person is working in the best interests of your cofounder, and is not an impartial third party.
The fact that you’re even asking if this pro
u/Able-Reason-4016
Sue for what the company is worth and then quit and go elsewhere
u/Jaydgaitin
Absolutely not. If he wants your equity he needs to buy it. Or you guys need to sell the company. He’s trying to strong arm you. You really think he’d just stop running it because you didn’t
u/FartyFingers
If you bought IBM shares in 1935, you still own IBM shares. They don't fade away because you haven't contributed anything to IBM since 1935.
If he wants your shares, he can buy them. If he w
u/feudalle
Its a divorce without a prenuptial. Give some of the shares back, dont give any back, up to you. Here is the kink though, if you have no written agreement what stops your partner from dilutin
u/Dry_War_747
As others have stated, ask for a buyout or get an attorney to put together an agreement. Definitely a rookie move but it’s not irreparable.
u/julian88888888
25% kinda kills the company so find a way to give up whatever % you can at whatever the company can afford. 25% of 0 is 0.
u/realmenus
Yeah. Don’t forget to add a nice premium OP. The audacity to even propose this
u/beliefinphilosophy
Your cofounder has an ego problem and doesn't recognize the value of soft skills. He likely believes that "sales is easy anyone can do it" and "the product sells itself"
He fails to recogni
u/edkang99
Sorry to hear this. I’ve been similar situations. I’ll tell you what my mentor told me.
Your first obligation is to honor yourself, then honor others. (Everybody else will want it the other
u/dumbfoundded
He definitely would have vested over any sort of standard timeline.
u/Remote_Volume_3609
You tell him that his incentive to "continue the project" is the part where he owns 40% of the damn company lol. And the damn salary he literally gets. I would point out that if him owning 40
u/SurftoSierras
This is a fair risk, though if he owns 25% and partner has 40%, who has the rest and will they accept a dilution as well?
Lots of games can be played, however.
u/theredhype
It occurs to me that acquiring half of your equity would put him at 52.5% and I wonder if there is some motivation around control that is driving him.
In any case, I agree with _literally e
u/zaskar
I read up to the in or out statement.
He can buy your 50% for 50% of the valuation performed by a 3rd party. Or you can sell your stake to someone else. Nothing in your earned equity is thei
u/Jasperbeardly11
Yeah don't accept this.
u/KindDoctor4142
This doesn't sit right with me either, especially after 5 years of building, leading sales, and taking reduced pay. If anything, offering equity to future hires makes more sense than handing
u/n1njal1c1ous
Vested is vested tell him to GTFO. I didn’t even read what you wrote, vested is vested.
u/toolate
Who is paying this mediator? It sounds like this person is working in the best interests of your cofounder, and is not an impartial third party.
The fact that you’re even asking if this pro
u/AgileDepartment3686
Yeah I imagine it does - worth looking at the Shareholders Agreement ESS Plan Rules as well and seeing if there is a mechanism for equity buy backs.