# What is Bad Leaver? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Legal  
> **Canonical Citation:** [https://spidits.com/startup-glossary/bad-leaver](https://spidits.com/startup-glossary/bad-leaver)

## Definition
A Bad Leaver is a founder or employee who leaves a startup under unfavorable conditions, which usually forces them to forfeit unvested and/or vested shares.

## Architectural Mechanics & Deep Dive
A Bad Leaver is a founder or employee who leaves a startup under unfavorable conditions (such as dismissal for cause, material breach, or joining a direct competitor). Bad leaver clauses typically force the individual to forfeit all unvested shares and sell vested equity back to the company at nominal value.

## Industry Applications & Real-World Use Cases
Protecting a startup's equity pool from departed founders who violate agreements

## Frequently Asked Questions

### What qualifies someone as a bad leaver?
Dismissal for cause, fraud, breach of shareholder covenants, or voluntarily resigning early to join a direct competitor.

### What happens to a bad leaver's shares?
Unvested shares are canceled immediately. Vested shares are typically bought back by the company at the lower of fair market value or nominal cost.

## Related Terminology
- [shareholder-agreement](https://spidits.com/startup-glossary/shareholder-agreement)
- [vesting](https://spidits.com/startup-glossary/vesting)
- [good-leaver](https://spidits.com/startup-glossary/good-leaver)

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*From the SPIDITS AI Knowledge Base (311+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*