Founder vesting: what if a co-founder leaves?

1. Check the terms, not just the share split

A co-founder may leave before your next funding round. The share split alone will not tell you what takes place. Equity means an ownership stake. Vesting ties some rights in that stake to time or work. Some plans issue shares first, then allow a buyback if work ends. Do not think the shares vanish when a founder leaves. [3]

Stripe Atlas uses four years and a one-year cliff by default. YC describes that as a common Valley setup. It is not a law or the right plan for every team. Your start date, grant and signed terms may differ. These sources show local norms, not rules for every country. [1] [2]

Start with one question: which shares could this person keep? Find the terms that answer it. Then ask what else changes if they stop work. Share rights, a job and a board seat each differ. A board helps guide and govern a firm. Ending one role need not end the other rights. [3]

• Find the signed grant and share purchase terms.
• Read the company rules and any shareholder deal.
• Check job and board terms as separate records.
• Ask a local lawyer to flag gaps or terms that conflict.

2. Build a short vesting record

Use one row for each grant, not one row per founder. A grant is a set of shares or rights given on stated terms. A person may have grants with different start dates. Link each row to the signed source. A cap table is a record of who owns shares. It should agree with those sources, not replace them.

Record the start date and when the cliff ends. Note when each next part vests and when it ends. A prior-work credit may move the start date. Acceleration means some shares vest sooner after a stated event. Use either in the count only if the terms allow it. [1]

Give the row an owner and a date last checked. Keep open points beside it. If two files disagree, do not pick the one you prefer. Ask counsel to resolve the gap. Keep the records private and share them only with approved people.

• Grant ID, founder, share class and share count.
• Signed source link and the version in force.
• Start date, cliff date, vesting steps and end date.
• Rules for leave, part-time work and earlier vesting.
• Buyback price, time limit and who may act.
• Review owner, open questions and date checked.

3. Test three departure dates

This is a made-up example, not a suggested legal term. A founder has a grant of 4,800 shares. The plan runs for 48 months with a 12-month cliff. At that cliff, 25% vests. After that, 100 more shares vest each month. This follows Stripe's monthly steps. [1]

Assume all dates are exact completed months from the start. There is no prior-work credit, early vesting or pause. The grant stays the same. At month 10, none has vested under this schedule. At month 12, 1,200 has vested. At month 18, 1,800 has vested and 3,000 has not.

The month-18 result is 37.5% of this grant. It is not 37.5% of the firm. New shares, other grants and share classes affect the wider picture. A vested share count is not cash or a promise of value.

These counts test the schedule only. They do not decide who keeps or buys the shares. The terms for leaving may affect vested shares too. Ask counsel to check the actual rights and price. Do not edit the cap table to show a transfer just because a formula says so. [3]

• Month 10: 0 vested; 4,800 not yet vested.
• Month 12: 1,200 vested; 3,600 not yet vested.
• Month 18: 1,800 vested; 3,000 not yet vested.
• Check the real grant, dates and legal terms before using a result.

4. Read the rules for leaving separately

Leaver terms are rules for a person who stops work. Some plans use the labels good leaver and bad leaver. Those labels have meanings set by the signed terms. They are not a moral verdict you can make on your own. Orrick's UK guide explains how such terms can affect some or all shares. [3]

Ask which event counts as leaving and on which date. Check who may decide the status and who must agree. Find any right to buy shares back, its price and deadline. A buyback must meet the actual legal rules. A spreadsheet cannot grant a right the company does not have. [3]

An option is a right to buy shares on set terms. It is not the same as a share already held. Options may have their own rules and time limits after leaving. Keep them in a separate review. Do not think a vested option can be used at any time. [3]

• What ends the founder's service under the signed terms?
• Can departure rules affect vested shares as well?
• Who must approve a buyback or a change?
• Which price, deadlines and notices apply?
• Do share and option documents conflict?

5. Review changes before the next round

At pre-seed, agree the plan while the team works well together. Write down the work each founder will do. At seed, check the signed grants against the cap table. At Series A, review any new terms beside the old ones. Do not treat a new schedule as a simple date edit.

If an investor asks for fresh vesting, mark what would change. Check any credit for work already done. Ask which grants are covered and which past rights remain. Keep a proposed change apart from an approved signed change. Seek legal and tax advice before agreeing it.

If someone leaves, check how work passes on as well. Plan who owns each open task and who takes over access. Check company ownership of code and other work. Follow a lawful process for jobs, board roles and records. Do not use this checklist to dismiss a person or force a transfer. [3]

• Compare old and proposed terms side by side.
• Name each grant affected by a proposed change.
• Record needed consents and local advice.
• Plan work, access and records for a lawful handover.

6. Give investors a clear, bounded answer

Due diligence means checks before investing. A fund may ask how a founder leaving affects the team and shares. Share a short note based on approved records. State the grant, dates and open legal points. Do not say the issue is settled while approvals are missing.

AI can help list terms or compare draft versions. Use only an approved tool for private files. Ask it to point to the exact clause for each claim. A trained person must check the reading and share math. AI should not decide leaver status or whether a transfer is valid.

This is general founder guidance, not legal, tax or investment advice. The Stripe and YC examples show common US practice. Orrick's guide on leaving deals with the UK. Neither sets the rules in your country. Get trained local legal and tax help. It must cover your firm and each founder at risk. A clean record does not promise funding.

• State what the signed terms show.
• Keep example counts apart from legal outcomes.
• Name unresolved rights, approvals and next review steps.