Startup Confessionals: Combat the Awkward Convos around Vesting

Why should we have a vesting schedule?

As someone who cofounded their own business, I am a firm believer in having a vesting schedule, but I try not to let that get in the way of the answer.

1. It protects your business.

When a venture idea becomes a real, registered business with shares and a founder’s agreement, it goes from being worth Monopoly money to cold hard cash. (Even if it’s only pennies at the moment.)

2. It gives you security.

As a founder, you want to know that your team will be with you through the highs and lows of startuphood. Vesting gives you a steady stream of equity that unfolds over time, so you will have the additionally protection of the vesting schedule.

3. It provides structure to your expectations

In the beginning, it is fun to bounce ideas around the bar and to start drafting up MVPs. But as the mundanity grows and the ideation honeymoon wears off, you will need to understand what is expected of every team member.

4. It will allow your investors to sleep at night.

Early stage investors are putting money in the team before they see or harvest the rewards of the product. They want to know that the team they have invested in will be there to see the iterations, heartbreaks, and highs through until the end. Their payout is based more on the team and their commitment in these early days, so give them peace of mind when they put their personal or venture capital in you.

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Kaitlin Fritz

Kaitlin Fritz

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Forbes 30U30 Entrepreneur | Enterprise Educator | Supported 400 founders in UK and Abroad | Podcaster | And believer in strong coffee, no code, and kindness.