Becki DeGraw on founder vesting, advisor equity & the 4-term-sheet play

Summary

This Week in Startups legal basics episode features Wilson Sonsini partner Becki DeGraw explaining founder and advisor equity. They cover why founder vesting exists, the YouTube vesting example, how VCs react to prior founder work, and how to negotiate multiple term sheets. The conversation also covers structuring advisor grants and handling intense negotiations without burning bridges.

• Founder vesting allows companies to repurchase unvested shares and protects investors and cofounders.
• Even bootstrapped startups may benefit from founder vesting.
• YouTube cofounder Jawed Karim owned a fraction of the company due to vesting, showing compounding effects.
• VCs reset vesting expectations based on company stage and traction.
• Multiple term sheets can create leverage and reduce exploding deadlines.
• Advisor grants should use clear milestones or active termination.
• In heated negotiations, founders should remove emotion and protect their reputation.