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On Structuring Ownership
(Source Needed)
Ziya G. Boyacigiller
This presentation was created and given by Ziya
Boyacigiller who was leading Angel Investor and a loved
mentor to many young entrepreneurs in Turkey. We have
shared it on the web for everyone’s benefit. It is free to
use but please cite Ziya Boyacigiller as the source when
you use any part of this presentation. For more about
Ziya Boyacigiller’s contributions to the start-up Ecosystem
of Turkey, please go to www.ziyaboyacigiller.com
1. Stock: 40-60% reserve for investors, 5-10% for CEO and another 5-10% for each
CEX, 10-20% reserved for employees. Calculate amount to assign based on
valuation at exit event.
Ownership percentages?
2. Vesting? Cliff?
3. Repurchase of Stock if employee leaves before fully vesting
a. Lower of market price or cost to employee
b. Promissory note instead of cash
c. Reassign purchase right
4. Create Common and Preferred Stock?
a) Liquidation preferences
5. Create Employee Stock Options?
6. IP and other property in exchange for shares?
a. IP rights transfer to company
7. Transfer of stock – unvested not allowed?
a. Right of First Refusal – 30-60 days from notice? Recurring if not fulfilled
within allowed tim
I. Company
II. Its assignees
III.Other shareholders
IV.Third-Parties
b. Buy-Sell Agreement – what valuation criteria to follow?
I. Prevents sales except as allowed
II. Transfers are allowed to certain parties (family) or upon events (death)
III. Parties agree to sell and buy at fair market value upon certain events
(termination)
c. Co-Sale Agreement? – and resulting control issues?
8. Voting Agreement – “sunset” clause?
9. Proprietary Information (NDA) & Inventions Agreement from all employees? Assign to
company any inventions that:
1. result from work performed for the company
2. are discovered during company time,
3. arise fr om the use of company materials, equipment, or trade secrets
10. Employment Agreement(s) with Founders/Key Employees? How to enforce these?

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Structuring ownership

  • 1. On Structuring Ownership (Source Needed) Ziya G. Boyacigiller This presentation was created and given by Ziya Boyacigiller who was leading Angel Investor and a loved mentor to many young entrepreneurs in Turkey. We have shared it on the web for everyone’s benefit. It is free to use but please cite Ziya Boyacigiller as the source when you use any part of this presentation. For more about Ziya Boyacigiller’s contributions to the start-up Ecosystem of Turkey, please go to www.ziyaboyacigiller.com
  • 2. 1. Stock: 40-60% reserve for investors, 5-10% for CEO and another 5-10% for each CEX, 10-20% reserved for employees. Calculate amount to assign based on valuation at exit event. Ownership percentages? 2. Vesting? Cliff? 3. Repurchase of Stock if employee leaves before fully vesting a. Lower of market price or cost to employee b. Promissory note instead of cash c. Reassign purchase right 4. Create Common and Preferred Stock? a) Liquidation preferences 5. Create Employee Stock Options? 6. IP and other property in exchange for shares? a. IP rights transfer to company
  • 3. 7. Transfer of stock – unvested not allowed? a. Right of First Refusal – 30-60 days from notice? Recurring if not fulfilled within allowed tim I. Company II. Its assignees III.Other shareholders IV.Third-Parties b. Buy-Sell Agreement – what valuation criteria to follow? I. Prevents sales except as allowed II. Transfers are allowed to certain parties (family) or upon events (death) III. Parties agree to sell and buy at fair market value upon certain events (termination) c. Co-Sale Agreement? – and resulting control issues?
  • 4. 8. Voting Agreement – “sunset” clause? 9. Proprietary Information (NDA) & Inventions Agreement from all employees? Assign to company any inventions that: 1. result from work performed for the company 2. are discovered during company time, 3. arise fr om the use of company materials, equipment, or trade secrets 10. Employment Agreement(s) with Founders/Key Employees? How to enforce these?