One of the earliest decisions founders face is how to split the equity in their team. This equity splitting process tends to be fraught with tension as it implies assessing each founder’s past and future contributions (Wasserman, 2012). Therefore, founders are often given the advice to avoid static equity agreements and instead include dynamic provisions such as vesting schedules and buy-out terms (Hellmann and Thiele, 2015; Wasserman, 2012). Whereas recent studies on founder equity agreements have examined determinants and consequences of founders’ equity distribution (e.g., Breugst et al., 2015, Hellman and Wasserman, 2016), there is a lack of research on founders’ choice to include dynamic provisions in such agreements.
Collewaert, Veroniek; Imhof,, Zoë; and Breugst, Nicola
"PROTECTING WHAT MATTERS? WHEN DO FOUNDERS SIGN DYNAMIC EQUITY AGREEMENTS? (INTERACTIVE PAPER),"
Frontiers of Entrepreneurship Research: Vol. 37
, Article 12.
Available at: https://digitalknowledge.babson.edu/fer/vol37/iss8/12