• October 2018
    M T W T F S S
    « Sep    
    1234567
    891011121314
    15161718192021
    22232425262728
    293031  

Early stage startup (C-Corp) and a soon-to-be board member is asking for $120K/yr in equity, how do we structure this?

With cash in short supply, bootstrapped startups are usually not in the position to offer cash compensation to directors. (Expenses, however, are normally reimbursed.) Instead, a young company often offers directors equity in lieu of compensation.

The customary range is between 0.5 to two percent of outstanding shares vested over a period of between two to four years. Lead directors can receive as much as 10 percent more than other members. Founders and investors who sit on the board should not be compensated with limited exceptions. If a company reaches the Series B round of financing, directors should be compensated with cash retainers and offered new equity incentives.

In terms of how to structure and draft this you should retain counsel. You can do that at LawTrades (disclosure: I’m the CEO!). We’re recreating the legal department for startups by offering flat-fee pricing, free consultations, free price quotes, and a money-back guarantee.

Legal is hard. Let’s tackle it together.

Speak to one of our Legal Pros and discover how we can help.

Let's Talk

Comment

There is no comment on this post. Be the first one.

Leave a comment

[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]
[if lte IE 8]