Resources for insight and
inspiration
Guides
Insights
Understanding Acceleration: Protecting Startup Talent Through Vesting Strategies
Acceleration is a mechanism in equity compensation that allows employees or founders to vest their stock options faster than the original schedule. It is most often triggered by significant events like a company acquisition. Acceleration ensures that key contributors are fairly compensated during major transitions and protects the value of their equity.
Vesting Schedules: The Strategic Foundation of Startup Equity Compensation
For both founders and employees, vesting schedules are more than a technical requirement. They are a strategic tool that determines how equity is earned, how long employees remain motivated, and how well a startup protects its ownership structure. A well-designed vesting schedule can strengthen retention, build loyalty, and align incentives between the company and its team.
Equity Incentive Plans / Equity Stock Option Plans
For startup founders, an option pool is more than a technical detail - it’s a strategic tool. The size, structure, and timing of your equity incentive plan can determine your ability to attract top talent, align incentives, and keep your company’s cap table clean for future investors.
Option Pools and Acquisitions: Navigating the Equity Landscape
When a startup is acquired, the treatment of its option pool becomes a critical factor for both founders and employees. Option pools influence retention, compensation, and how value is distributed during a merger or acquisition. Understanding what happens to these equity instruments helps founders negotiate better terms and employees make informed financial decisions.
FAQs
Open allBecause without them, your startup may not legally own its core technology - a major risk in funding, acquisitions, or IPOs.
Generally yes, but enforceability can depend on state law. Some states restrict how broadly employers can claim ownership, so tailoring language matters.
Yes. Contractors often create code, designs, or strategies, and without an agreement, they may legally own the IP.
They serve the same function - assigning inventions to the company and protecting confidentiality. The terminology varies by company or industry.
Yes. Pair NDAs with confidentiality and IP assignment agreements to ensure ownership of work product and protection of sensitive data.
Yes, but courts often scrutinize them. NDAs that are too broad or vague are harder to enforce.
Two to five years is standard. Trade secrets may be protected indefinitely if defined clearly.
Most venture capitalists won’t sign NDAs at the pitch stage. However, some strategic investors or partners may sign if sensitive technical information is involved.
Yes. Even a short policy clarifying what licenses are acceptable and requiring license checks before use can protect your company from major risks.
It depends. Copyleft licenses like AGPL may apply even if you don’t distribute your code. Always check terms before using them in your backend.
You could face legal action, be forced to release your proprietary code, or lose investor confidence. Compliance is critical.
Yes, but it depends on the license. Permissive licenses (like MIT or Apache 2.0) allow it, while copyleft licenses (like GPL) may require you to open source your own code.
Be transparent, respond quickly to user requests, and show that you protect data. Investors and customers reward startups that treat privacy as a priority, not an afterthought.
Not always. Consent is required for marketing emails, cookies, and sensitive data. Other legal bases, like contracts or legitimate interest, may apply.
Start with a clear Privacy Policy and limit the data you collect. These two actions cover many compliance basics and set a strong foundation.
Yes. If you collect data from EU or California residents, you’re subject to their rules—even as a small or pre-revenue startup.
Yes. Early compliance avoids costly fixes later and signals professionalism to investors and customers.
Not always. You can rely on other legal bases like contracts or legitimate interest. But consent is required for marketing emails and cookies.
Fines can reach up to €20 million or 4% of annual global revenue, whichever is higher. Even small startups have been fined for violations.
Yes. If you have users in the EU or monitor EU residents online, GDPR applies regardless of where your company is based.