What clause could be added to a termsheet to correctly compensate a founding CEO in the event that he is replaced by a VC backed external CEO?
It’s not 100% perfect, but an air-tight voting agreement + charter provisions that grant you the majority of the board seats should come pretty close.
This is the center of the Benchmark vs. Travis Kalanick lawsuit. Kalanik was given control of the board, so the investors had to convince him to step down. And now, one of them is suing him to get that board control back.
If you control the board, you control the terms of your exit, if any — assuming the company isn’t going under.