Business Pitch Dictionary by pitch.dog
Founder & employee equity · Working

Reverse vesting

Also called: founder reverse vesting

ELI5

Founders hold shares, but unearned shares can be taken back if they leave.

Used in conversation

“Reverse vesting was introduced at the seed round.”

Definition

A structure in which founders own shares initially but the company can repurchase unvested shares if service ends.

Here “Reverse vesting” means: A structure in which founders own shares initially but the company can repurchase unvested shares if service ends.

Pitch context

You will see “Reverse vesting” 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.