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Ask HN: Can vested founder equity be taken away after departure?

1 points by 8f2ab37a-ed6c ↗ HN
Throwaway account for privacy.

In the US, can a YC-style startup founder have her fully vested equity be taken away when she leaves the company several years in?

Are there any tricks in the law that somehow allow the company to obtain that equity back? Any known cases of founders losing it all after leaving, despite the fully vested status of those shares?

4 comments

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andymoe
Read the options agreement or whatever mechanism was used (or have an attorney read it). Sometimes there’s language in there that allows the company to buy back options you exercised at current valuation all the way up to ipo.
8f2ab37a-ed6c
Do you know if that applies to common stock as well, vs options?

I would actually love for the company to buy the stock back at the current valuation, that'd be the closest anybody will get in a while to seeing a payoff. I also know the company doesn't have anywhere close to the amount of funds necessary to do that though. And if that happens at later rounds with a higher valuation, that's fantastic.

troydavis
There’s no single answer for all companies, just what’s typical for boilerplate incorporation documents, and an entity with an options agreement is already past that point. Reading the company’s options agreement and its Articles of Incorporation and Bylaws (for restrictions on share transfers, right of repurchase, etc.) is the only way to answer your question.
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