Term sheet clause 16 of 25 · Founders and deal terms
Founder vesting in a term sheet
In plain English: Founder shares 'earn back' over time, usually 4 years with a 1-year cliff. Credit for time already served is negotiable. Typical: 4 years, 1-year cliff, some credit for past work.
Founder-friendly
Credit for time served; acceleration on termination without cause.
Investor-friendly
No credit; no acceleration.
What to watch for
Red flag
Full re-vesting from zero for founders who have worked for years.
How to model it
Don't judge this clause by reading it; put numbers on it. In our workbooks it's modelled in Founders & Vesting, so you can see what it changes in your ownership or your payout before you agree.
Not legal advice. Norms vary by country and market cycle. Have a startup lawyer review your term sheet before you sign.