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  2. LEGAL/CORPORATE STUFF
  3. Stock Terminology
  4. What the H@%$!! is ‘founder’s stock’ and does it have special value?
« Founder Equity Dilution by Industry
Full Ratchet Anti-Dilution Protection : Texas Startup Blog »

What the H@%$!! is ‘founder’s stock’ and does it have special value?

26 Aug 2008   | Stock Terminology

Tags: founder · glossary · stock

LINK TO ORIGINAL ARTICLE:
  • http://gigaom.com/2007/11/06/what-the-h-is-founders-stock-and-does-it-have-special-value/

Whenever I’ve heard ‘Founder’s Stock’ thrown around it is actually referring to the price per share rather than any elaborate voting rights. Most founders will purchase the stock at par value instead of the valuation price that might follow financing (which is when most employees would join). Any employee would love to get the founder’s price on the stock since it’s usually fractions of a penny.

The other major difference is that Founder’s typically own shares instead of options so they have inherent long term capital gains benefits (since they don’t have to take a hit when exercising the option). It also means that you retain the voting rights associated with the shares instead of waiting until you exercise your options when they vest.

>>> READ MORE at:
  • http://gigaom.com/2007/11/06/what-the-h-is-founders-stock-and-does-it-have-special-value/
« Founder Equity Dilution by Industry
Full Ratchet Anti-Dilution Protection : Texas Startup Blog »

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