What should you do when a valuable employee is fully vested and asks for more equity? π
In general, this is very positive and your inclination should be to do a refresh.
The fact that the employee is still here means they're good, and asking for equity shows they want to stick around and keep building with you.
So the question is mostly how much, and over what period of time.
There are many ways to solve this depending on your constraints (and if you want advice on your particular situation, reply to this post), but our default is to give a meaningful percent of what was given and make it backload vest over the same vesting period.
Letβs unpack this.
What is meaningful?
1/2, 1/3, or 1/4 of what they were originally given. Itβs easy to explain, and the fraction should depend on how far along the company has come and how much you value the employee.
What is backloading vest?
You vest less initially and more later. For example, if you give 1%, then you vest 1/8, 1/4, 1/4, 7/8, or some other flavor of this.
The reason for this is that you're saying, "Yes, we really want you to stay, but you need to stay all the way to earn the full amount."
Donβt take these numbers verbatim; this is just a framework for how to think about it.
You should always adapt all advice to your specific situation.
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