[patio11]

Yep. Not representative of an individual who might have motivated my comment, but:

Seed round: "Marketing Bob, you'll be employee #2. 1% -- 4 year vesting, 1 year cliff. You'll do everything from writing blog posts to attending conferences to talking to every single customer."

B round (2.5 years later): "Marketing Bob! Great news: we're now worth a billion dollars! That owes an incredible amount to your heroic efforts! You have excellent ability to become a co-founder at your next gig! Which starts whenever you want it to! We strongly recommend you start planning for it right now, and we'll even clear your calendar for the next two weeks to allow you to devote all of your efforts to planning! We hope you are socially aware enough to understand what we are saying here!"

Marketing Bob may well be CEO Bob at his next gig, but he'll be entering it being a) fired and b) having had ~$3.75 million stolen from him. (One would hope that the co-founders would go to the mattress with their VCs when the VCs say "Come on, vesting, we all know how it works. Of course the employee stock pool gets the 37.5 basis points back. That's like twenty engineers -- we need every point now!")

[irremediable]

This was a good example for finance noobs like myself -- what does the last sentence mean, though?

[nsp]

37.5 basis points is 0.375%, the percent of his stock that had not yet vested and this is returned to the stock option pool to be given out to future hires

[loumf]

Bob has 1%, so it's 37.5% of his stock that is not vested after 2.5 years. (0.375% of the company's stock)

It's 25%/year with 4 year vesting (so 25 + 12.5 for the 1.5 years left)