TLDR Founders · MISCELLANEOUS
DEAD EQUITY MAKES YOUR COMPANY UNINVESTABLE
Summary from the TLDR Founders newsletter
It can seriously hurt a startup if a co-founder departs when it isn't prepared. Having significant "dead equity" on your cap table makes it difficult to bring on new investors looking for clear ownership targets. Setting up proper vesting schedules for co-founders ensures that they don't take a large portion of the business with them if they depart.