I really like most of this structure — for a “late” cofounder.
Being a true co-founder is a long term commitment. And it involved more buy-in, more ownership, than a pure VP.
This equity package is consistent with that. You are getting:
- 1% now. This is basically a VP-level equity package, albeit a very good one, because it’s all vested up front. Let’s call that a Super VP level package them.
- 9% more over 4 years. This gets you to 10%, which is true early-stage co-founder status; it’s a lot; but
- If you leave before exit or really before the journey is “done”, you just get the 1%. I.e., you are “just” a Super VP. This is the right idea (if you check out, or don’t work out, you don’t get the ‘founder’ part of the package) … but a bit extreme to me.
I’d prefer a compromise, which is vesting the 9% over say 10 years with 2 year cliff for next 1%. This is sort of how VC firms do it. That way, you get 1% up front, another 1% at the end of Year 2, and then 8% more over the following years.
This incents you to go long like a true co-founder. Even if you weren’t there on Day 1.