Reverse vesting keeps a founder’s shares subject to company repurchase. The founder owns the shares, but earns them over time by continuing with the company. section 4.2
A founder leaves halfway through
Suppose a founder’s shares reverse vest over four years. Leaving after two years means half the shares have vested; the company can buy back the remaining half. section 4.2
The practical distinction is:
- Founder shares are purchased cheaply and owned outright, but unvested shares remain vulnerable to company repurchase. section 4.2
- Vesting makes a right to stock unconditional over time; leaving before vesting means forfeiting the unvested portion. section 4.2
