Is it common for shareholders to get paid out over 3 years in a startup acquisition?

For founders — yes.

For others — less so.

Founder payouts have become more and more stretched out, often over 3 years, following an acquisition.

If you get acquired, bottom line, between hold backs, retention grants, retention payments, reverse vesting, etc., money held back in escrow … expect 40% of your total payout to be “held back” for 2–3 years. (!!) Sometimes even more with larger retention grants from top tech companies.

And 3 years is getting more common than the old 2.

When I sold my first start-up in 2004, I only had to stay 21 days. That was nice.

Those days are long gone.

The flip side though is, on average, deals are larger. So having to stay longer, to make more money, is probably worth it.

A little more here: My 4 Year Anniversary. Thoughts on Selling Your Company. | SaaStr

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Published on August 18, 2018

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