Startups should protect themselves by managing their and shareholder interests by having a founder vesting agreement.
Every startup should have a vesting agreement, a startup’s equivalent of a pre-nup agreement, right from the beginning to protect the interest of the shareholders, investors and employees alike.
For every startup that raises funds and takes off or goes on to become a successful household name, there are thousands more that fail to do so. Aside from the common pitfalls that affect startup founders – like new teams that have previously not collaborated before, founders’ inexperience in validating the market or inability to execute – you’d be surprised to find that many teams do not protect themselves properly by managing their and shareholder interests by having a founder vesting agreement.
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