Startup Question about Involuntary Termination of a Cofounder

[greengrace]

Startup Founder Question

1. What are the scenarios which you consider where a co-founder can be terminated without any cause or reason provided to him.

Some scenarios in question:

a. An investor or board members say that we need a person for marketing (There is no CMO until now), does any existing C-suit member is removed just to get in a new CMO for any reason like restructuring, cost-cutting etc.

b. In a tech company does CTO is removed because board members think that we don't need CTO for the product which is already market fit and its under support and maintenance (meaning we don't want to include new module but want to scale already implemented product). Does this ever or can happen?

c. Any other scenario in your mind?

2. In the case of Involuntary Termination of a Cofounder Without a Cause what is the vesting method of his non-vested shares that you incorporate in your start-up?

Option:

a. Forfeit all the non-vested shares of departing/terminating co-founder.

b. Buyback all the non-vested shares of departing/terminating co-founder at the time of termination.

c. Fully vest all the non-vested shares of departing/terminating co-founder.

d. any other option?

 

[williamsnodo]

@greengrace There are only director positions which are relevant. Rest are all made up. As per law of the country
It can be president secretary treasurer
Director managing director
Partner managing partner

These are legally the most powerful positions

Cmo ceo cto are all made up positions

If the question is to safeguard your intrest in the company either you should have majority voting rights
Or
Clever use of minority share holder protection.

Be wise when you give away your shares.

 

[greengrace]

@williamsnodo Thanks for your response

 

[brooklyn1992]

@greengrace Eh it tells me that the original team assembly, or/and vision was itself wrong.

If I were an investor, I'd just bail.

And toss the t-shirt in a bin.

 

[greengrace]

@brooklyn1992 Thanks for your response