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Ask HN: What milestones do you use for vesting equity of minority co-founder?

7 points by trussi ↗ HN
I'm looking to bring a front-end developer on-board as a co-founder with equity compensation (5-10% total equity). I want the equity to vest 3-4 times based on achieving 3-4 milestones (i.e. 1% for achieving M1, 1% for M2, 1% for M3 and 2% for M4).

What milestones have you successfully used to tie the vesting to?

How have you structured the vesting for part-time participate (that will probably grow to full-time as the business can support it)?

4 comments

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answerly
Why not just use the standard four year vesting with a one year "cliff" for the full 5-10%? If your co-founder isn't a good fit or isn't hitting milestones you can part ways early and retain all or most of the stock.

More on founder vesting here: http://cdixon.org/2009/04/21/founder-vesting/ http://venturehacks.com/articles/get-vested-for-time-served http://venturebeat.com/2010/01/04/ask-the-attorney-founder-v...

trussi
Time-based vesting implies full-time participation. In my case (and probably a lot of other cases), we are both part-time until the product gets traction. Then we will take the risk of going all-in.

If I tie the vesting to milestones instead of time, I should be able to fairly compensate the other person's part-time efforts without walking down the 'you aren't working enough, your shares aren't fully vested' path if/when we divorce.

flignats
Why not base the first 1% or so on an hourly vesting schedule? So if he is working part time he can rack the up the hours all year or however long it takes. Make the milestones 'hours worked'
trussi
'Rack up the hours all year' just sent chills down my spine! That's exactly what I want to avoid. :)