This article posted to our partner site Mondaq.com illustrates the importance of ensuring that vesting provisions do not create a conflict of interest.
\nVesting provisions can be used by investors to ensure that founders remain committed to the company and do not simply cash out as soon as the investor’s money increases the company’s valuation.
\nImplemented improperly, as it was in the court case discussed in this article, vesting provisions can incentivize the very behaviour they seek to prevent and make selling the company more profitable than not selling.
","frontmatter":{"title":"Blog Bite: What Is the Aim of a Vesting Provision?","date":"June 18, 2018","description":"This article posted to our partner site Mondaq illustrates the importance of ensuring that vesting provisions do not create a conflict of interest.","author":{"id":"cmcivor@cobaltcounsel.com","first":"Chris","last":"McIvor","bio":null,"image":null},"tags":["Term Sheet","Shareholders Agreement","Investor Term Sheet"]}}},"pageContext":{"slug":"/blog-bite-what-is-the-aim-of-a-vesting-provision/","previous":{"fields":{"slug":"/blog-bite-how-can-investors-use-drag-along-provisions-to-address-their-exit-expectations/"},"frontmatter":{"title":"Blog Bite: How can investors use drag-along provisions to address their exit expectations?","tags":["Term Sheet","Shareholders Agreement","Investor Term Sheet"],"author":{"id":"cmcivor@cobaltcounsel.com","first":"Chris","last":"McIvor"}}},"next":{"fields":{"slug":"/blog-bitewhat-terms-should-be-negotiated-in-a-term-sheet/"},"frontmatter":{"title":"Blog Bite: What Terms Should Be Negotiated in a Term Sheet?","tags":["Term Sheet","Investor Term Sheet"],"author":{"id":"cmcivor@cobaltcounsel.com","first":"Chris","last":"McIvor"}}}}}}