Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Vesting for part-time partners

I'm adding someone to my team who will start with as little as 1 day/week, which is actually all I need from them at this stage. Both of us are interested in seeing them come on full-time with significant responsibility within a year if the business justifies it and the relationship proceeds as expected. They're willing to work for equity and that's my preference, too, both because of cash flow and my desire to see them become vested in the company.

Have others structured vesting for part-time/variable-time partners? I'm thinking I'd like something like this: 50,000 shares vesting evenly of 750 workdays (i.e 3 yrs full-time). That way, if they only do 1 day/wk for a year and leave, they only walk with less than 3,500 shares, but if they come on full-time in 6 months and stay they fully vest in less than 3.5 years.

Anyone else done something like this, or see problems with it?

Thanks,
Kris

14 Replies

Brian McConnell
0
0
Brian McConnell Entrepreneur
Head of Localization at Medium.com
This makes sense to me for all founders because this is often the root of disagreement about fairness in equity allocation. That said IANAL so talk to an attorney. B
José Ordoñez
0
0
José Ordoñez Entrepreneur • Advisor
Senior Lab Manager at Tintri (QA/Support/IT/Virtualization)
I would hope that if I did a deal like that with someone, that if and when I went Full Time, the past 1 day a week would be accelerated to as IF I were full time back then. That would make it seem fair for me but then again, I'm looking at it from an employee's point of view vs employer.
Kris Braun
0
0
Kris Braun Entrepreneur
Co-founder of KidsWifi
I had also thought about an acceleration clause. Again, would be interested in hearing if that's been used in practice.
Nancy Lush
0
0
Nancy Lush Entrepreneur
Senior Executive, software product development and healthcare industry
Hi Kris, I used to know a Kris Braun many years ago. Did you ever work at Raytheon? Nancy Stobbart Lush
Kris Braun
0
0
Kris Braun Entrepreneur
Co-founder of KidsWifi
Hi Nancy -- must have been another. There is a Raytheon office in town here (Waterloo), but I haven't worked there.
Michael Barnathan
0
0
Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
I've used the same terms I'd otherwise use (I don't normally include acceleration), but with the vesting time in logged hours rather than chronological days. You don't want to vest a part-timer in days - they'll accumulate without doing anything, and then you'll probably have to fire them at some point.
Kris Braun
0
0
Kris Braun Entrepreneur
Co-founder of KidsWifi
Thanks, Michael -- that's my intent, thanks for clarifying the language around logged hours.
Eric F. Galen
1
0
Eric F. Galen Entrepreneur
Partner at Hertz Lichtenstein & Young LLP | Venture Catalyst at Membrain Ventures
Hi Kris - Subject to any option plan or similar document you may have, you can structure vesting of options fairly creatively. In your description above, do you want a certain number of options to vest upon every day of work, and for the person to log the time worked?

You could also do something like this: "For this phase of the company, I expect you to work 1 day/week without cash compensation. For your work, I will grant you ____ options in the company, to vest monthly over 4 years, subject to a 6-month cliff (to give us time to start working together to make sure this works for us). If and when your engagement with the company changes (i.e., when you will work more than 1 day/week), we can revise the agreement, increase the options, and so forth."

However, if you think that this person's work schedule will change often (i.e., 1 day/week for a month or two, then two days/week for a month, then back to 1 day/week), then simply specifying a set number of options for each day worked (perhaps with a cap, and always upon a mutually agreed upon work schedule) might make more sense.

These are just some initial, informal thoughts - if you'd like to talk in greater depth, feel free to email me.

Eric F. Galen
Attorney + Entrepreneur
[removed to protect privacy]
Scott Durgin
0
0
Scott Durgin Entrepreneur
Founder & CEO 440labs
I've found a combination of both vesting based on time/pro-rated days coupled with milestones and/ordeliverables - especially in the initial term, have proven very useful. By definition part-time folks do not have your business as their top priority, as such finding ways to create clear alignment on goals is very useful. Maybe this person's role is more straight-forward but if not getting clarity up-front with vesting terms is useful.
James Bond
0
0
James Bond Entrepreneur
CTO at SupplyBetter
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?