How do I remove CO-Founders equity?
6 Steps to Respectfully Firing Your Co-founder
- Heed the warning signs. The members of a good team like one another.
- Ask your advisers and mentors for council.
- Talk out options with your legal council.
- Check in with advisers again (this is not an easy decision).
- Bite the bullet.
- Be open with your company’s stakeholders.
Can equity be taken away?
If you’ve already exercised options, you own those shares—your company usually can’t take them away from you when you leave. Also, if you early exercised (exercised options before they vested), your company has the option to repurchase any unvested shares when you leave.
What happens when a cofounder leaves a partnership?
If your co-founder leaves before their shares are fully vested, the company will be able to take ownership of the unvested shares, avoiding the situation where there is “dead equity” on the startup’s cap table.
Can you fire someone with equity?
In short, yes, assuming this termination is made for good-faith reasons, such as business downsizing or poor work performance. Most employees are “at will,” which means you are hired and fired at the company’s discretion without a contract.
What happens to my co-founder’s stock when he leaves the company?
If your co-founder was assigned common stock, they own any vested shares free and clear no matter when they decide to leave (which is why vesting schedules are so important). If they have options, they can exercise any that have vested.
Should you terminate your co-founder?
In the latter scenario, if you are unable to come to a resolution and your co-founder does not choose to leave voluntarily, you and your team may decide that it’s better to terminate your co-founder to avoid further difficulty.
Do I need a lawyer for a co-founder exit?
The last thing you want to deal with is a messy exit, so it’s very important that in any co-founder exit scenario you talk to your attorney. Your attorney can make sure that you handle all aspects of the exit according to legal best practices and help you avoid future legal disputes.