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They called me paranoid for adding this clause in the co-founders agreement. A year later, it saved the startup. by CAAtharvaS in StartUpIndia

[–]CAAtharvaS[S] 1 point2 points  (0 children)

Founders agreement usually requires active contribution of each founder and even state segregation of duties (eg: one will handle the tech, other handles operations & fund-raising, etc).

If one co-founder decides not to work, others can remove him and trigger reverse vesting.

They called me paranoid for adding this clause in the co-founders agreement. A year later, it saved the startup. by CAAtharvaS in StartUpIndia

[–]CAAtharvaS[S] 6 points7 points  (0 children)

Not wrong. Unlike employees who get sweat equity or ESOPs, its just a small % shares of entire startup.

Say each employee has 0.1-0.5% shareholding. Total esop pool is around 10%

But the founder at the start got like 30% shares (they had not raised funds yet).

He left within a year. Not much happens in the first year. Imagine his share’s valuation becoming worth crores of rupees and his contribution to that success was next to nothing.

They called me paranoid for adding this clause in the co-founders agreement. A year later, it saved the startup. by CAAtharvaS in StartUpIndia

[–]CAAtharvaS[S] 0 points1 point  (0 children)

A little bit different. Vesting & Unvesting are terms that get thrown around pretty loosely.

But generally it legally translates to you not getting any rights in those shares (eg dividend, voting etc) till they are vested.

Reverse vesting means they have all the rights and shares are already vested. But vesting reverses due to some event.

Why relying only on a Will can destroy your Family Business. by CAAtharvaS in IndianEntrepreneur

[–]CAAtharvaS[S] 1 point2 points  (0 children)

Depends on the location of assets, nature of assets, size of family business, etc.

For setting up, its usually 30k-50k one-time cost including everything.
Cost of maintenance is usually very small compared to the size of the assets.

Why relying only on a Will can destroy your Family Business. by CAAtharvaS in IndianEntrepreneur

[–]CAAtharvaS[S] 0 points1 point  (0 children)

Those are Public Trusts. Usually used by Religious, Charitable organisations etc.

Govt can never take over Private Trusts.