Revesting frequently enters the conversation when new capital comes into a company—particularly in connection with priced rounds. Investors may ask founders to revest all or a portion of their vested shares to realign incentives and reduce retention risk. What’s “market” on the number of shares subject to revesting?
Here’s what we found in a survey of our recent early-stage deals:
• The majority of founders revest 75%-100% of their previously vested equity
• 32% revest half of their equity
• 14% negotiate this down to one-quarter Questions to consider:• Founders:
How much equity are you willing to be subject to revesting for a deal?
• Funds: How important is having a founder revest?
• Lawyers: What provisions do you put in to protect founder equity during revesting?