Bad leaver
Also called: bad-leaver status
ELI5
Someone leaves under defined bad circumstances and may lose more equity.
Used in conversation
“The bad-leaver clause is unusually broad.”
Definition
A person leaving under specified adverse circumstances and receiving less favourable equity treatment.
Here “Bad leaver” means: A person leaving under specified adverse circumstances and receiving less favourable equity treatment.
Pitch context
You will see “Bad leaver” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches founder & employee equity.
Why it matters: In founder & employee equity, a loose definition can change rights, obligations, approval, disclosure or enforceability.
Caution
Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.
Sources & evidence · 5
Direct term-level sources and supporting source families.
- National Venture Capital Association — Model Legal DocumentsDirect source · institutional · checked 2026-08-16
- U.S. Securities and Exchange Commission — Small Business Capital Formation GlossaryDirect source · primary · checked 2026-08-16
- U.S. Securities and Exchange Commission — Exempt OfferingsSupporting source family · primary · checked 2026-08-16
- Y Combinator — Safe financing documentsSupporting source family · practitioner · checked 2026-08-16
- Y Combinator — Series A Term Sheet TemplateSupporting source family · practitioner · checked 2026-08-16