The UnNoticed Entrepreneur Naive entrepreneurs fail to protect their equity and exit poor; with Jotham Stein
Aug 25, 2022
Jotham Stein, attorney and founder who helps entrepreneurs protect equity and negotiate exits. He explains investor language, key contract terms like board seats and liquidation preferences, when to lock in protections, and how to pick investor types. Short, practical takeaways about keeping control and planning exits.
AI Snips
Chapters
Books
Transcript
Episode notes
Learn Investor Language Before You Sign
- Learn the language investors use before you sign anything so you enter negotiations with full information.
- Jotham Stein recommends understanding board seats, equity percent, liquidation preferences, and having a professional prenuptial style contract ready.
Limit Investor Board Seats To Keep Control
- Protect control by limiting investor board seats because board majority can remove founders.
- Negotiate board composition, equity percentage, liquidation preferences, and a strong employment agreement for founder protections.
Sign A Founder Employment Agreement Early
- Put a clear employment agreement in place for yourself that defines vesting, acceleration, and severance.
- Jotham Stein says define 'cause' narrowly and include equity acceleration so firing doesn't wipe out founder shares.
