Exiting

What the greatest technology investors say about Exiting

A Fair Vesting Formula Optimizes Interest Alignment

Basil Peters angel investor and Principal Strategic Exits Corporation

“Investors get 100% of their money back on the sale [of the company], so 50% vesting on the sale is fair and optimizes alignment [between entrepreneurs and investors].

[The] most fair vesting formula-  Assuming that was the fundamental agreement, and that 50% of the value is often created at the exit, then reverse vest: 50% of the shares [vesting] daily over  a three year period, and the other 50% when there is a ‘sale’ of the company.  

All vesting for senior employees accelerates on a sale of the company.”  Basil Peters, Maximizing Exit Value Angel Capital Association,  Annual Summit Workshop Apr. 15, 2009;  http://www.basilpeters.com/Presentations/Maximizing_Exit_Value_20090415_Part_2.pdf,  pg 30-31