How should you compensate a resigning co-founder that has done strong pre-launch work?
6 answers from the community
shouldn't he or she have founder shares vested?
Equity or a cash payout (or royalty, I guess). A combination of what was decided at the beginning and what everyone feels is reasonable now. These things are fluid.
Original poster - yea the shares are vested with a 1-year cliff, but we haven't passed that year yet.
Looking to convert them into an Advisory role, but I'm not sure what would be an appropriate % or cash/royalty payout.
Thanks for the help
That's why it's a bad idea to accept cliffs if not getting compensated elsewhere.
If you want to do the right thing then just make a board resolution to not buy back the stock and let it vest normally.
OP: thanks I think that's the route we will take
I faced this myself - having an "amicable divorce" with my original co-founder. We settled with me keeping 95% and him getting 5%. This made sense since the company wasn't yet (and still isn't launched and/or profitable). His participation assisted in wireframing the original product and helping convert everything from a general idea/concept into an actual business.
We didn't fuss around with a vesting schedule. I didn't want to pay him outright given the company's current position (not yet making $). He and I both figure he helped get us well down the path but that execution would be 95% of the work and so the proposed split felt fair to both of us.
Hope that helps.