Four-year vesting leaves departed founders holding six to eight times the 2.5% VCs now insist on

The hole between what a departed co-founder vests into and what Siegel says investors now accept runs 12.5 to 17.5 percentage points of the company ^[17], six to eight times the ceiling as a multiple ^[16]. The four-year document leaves those points where they are ^[8].

"We frequently see litigation that is nominally about intellectual property or confidentiality, but everyone knows the real goal is simply to get the equity back," Siegel wrote ^[9]. He describes suits costing several hundred thousand dollars that he says would never have been filed except to claw back departing founder equity ^[10]. "I see this over and over," he wrote ^[21]. Siegel does not disclose a dataset, survey or case count behind the 15% to 20% and 2.5% figures ^[22].

Siegel writes that a departed founder bloats the outstanding share count so that issuing a simple 1% option pool "suddenly requires 20% more shares than it otherwise should" ^[5]. If the inert holder is 20% of outstanding, the pool is a percentage of 100 instead of 80, so the same 1% takes 1 divided by 0.8, or 25% more shares ^[18].

The proposed replacement is a five- or six-year schedule, back-weighted at 5% in year one and 10% in year two, with a price and method for post-termination buybacks agreed at the start ^[13]. "Four years is too short," Siegel wrote ^[14]. A founder leaving at 24 months has 50% of the grant under even four-year vesting and 15% under the back-weighted one, a swing of 35 points of the grant ^[19]. On a grant of 20% of the company, that is 10% against 3% ^[20]. Three percent is still above the 2.5% ceiling ^[7].

The control fixes cost less to draft, and Siegel separates them out: a voting proxy handed to the sitting CEO the moment a founder leaves, a mandatory drag-along, or a nonvoting class for departed founders and other service providers ^[12].

Two other readings survive this evidence. One is that the 2.5% norm is investors repricing a contract already signed. The confidentiality suit is what that reprice costs when both sides pay their own lawyers ^[9]. The other is that most investors take the inert stake in the round price and never fund litigation at all. In my view the back-weighted schedule is the cheaper contract for whoever is still working in year five. It has a price: a founder asked to accept 15% vested at two years instead of 50% will want a bigger grant, and part of the saving goes back across the table at signing ^[19]. What would falsify it is financings closing at market terms with a 15% departed founder on the register, or the 2.5% figure turning out to describe one firm's clients.