I was an entrepreneur in a startup, in which I have fulfilled my vesting requirements. Can this be considered potential deal warehousing?
Jul 13, 2023
It's possible for you to transfer your founder shares into the fund, however there are a number of issues with this approach. The shares are typically transferred at cost, and founders usually buy their shares at the onset of the company at nominal price. The shares are typically common stock instead of preferred which means that they are lower in the preference stock. Finally, the company many not want to replace a founder with a fund on their cap-table because it may introduce diligence risk in future financings.