What is Good Leaver?
Good Leaver
A Good Leaver is a founder or employee who leaves a startup under favorable conditions, typically allowing them to keep some or all of their vested equity.
Why It Matters for Startups
Governs the legal rights and ownership distribution of the entity; configuring Good Leaver is critical for managing long-term cap table health and alignment during managing founder and executive departures smoothly without cap table disputes.
Detailed Deep Dive
A Good Leaver is a founder or employee who leaves a startup under favorable conditions (such as retirement, redundancy, or health issues). Shareholder agreements typically allow good leavers to keep some or all of their vested shares and option grants, preventing forced forfeitures.
Frequently Asked Questions
Q:What are typical good leaver scenarios?
Departures due to ill health, redundancy, retirement, or mutual agreement with the board where the leaver has performed well.
Q:What happens to a good leaver's vested stock?
They are usually allowed to retain their vested shares or stock options, though they may face restrictions on selling them until a liquidity event.
Quick Facts
- CategoryLegal
- Key ApplicationManaging founder and executive departures smoothly without cap table disputes
Coverage Trend12 Weeks
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