Business Pitch Dictionary by pitch.dog
Term-sheet control & investor rights · Working

Founder lock-up

Also called: founder transfer restriction

ELI5

Founders cannot freely sell shares for a period.

Used in conversation

“The founder lock-up supports investor confidence but affects liquidity.”

Definition

A restriction on founder share transfers for a defined period or event.

Here “Founder lock-up” means: A restriction on founder share transfers for a defined period or event.

Pitch context

You will see “Founder lock-up” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches term-sheet control & investor rights.

Why it matters: In term-sheet control & investor rights, 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.