Ask HN: Vested vs. Vesting Stock in Acquisition?

[ecmrthon]

Solo founder in startup, not looking to take on co-founders or any VC. I'm wondering about how I should handle stock vesting for my founders shares.

1)Fully vested stock OR 2)Vesting term, like 2-3 years.

I'm wondering from anyone who's going through an acquisition, whether having fully vested stock will deter any potential acquirers? It seems like if founders stock is fully vested, acquirers can just offer a separate retention package.

Also, is there any tax (capital gains) difference if the stock is fully vested versus not yet vested? If the unvested stock is just exchanged for stock in the acquirer and the vesting provisions continue, does this mean there would be less tax than if fully vested stock is exchanged for stock in the acquirer?

Hoping to hear from anyone who's gone through this. Know it's early, but don't want to make a mistake now that could cost me later.

[ecmrthon]

Anyone else have any insight? Was there a tax savings from having non-vested stock (ie. you didn't have to recognize capital gains?) during an acquisition.

I asked an accountant but they didn't know and I have to decide how to vest the stock.

[brudgers]

These are questions for an attorney/accountant team familiar with such matters. The answers depend on the form of the business and the jurisdiction in which it is established. Those are functions of it's operating plan.

Going further, worrying about tax implications for an imagined future pile of money is a bit of a distraction from making something people want. The difference between $20 million and $15 million is not going to change your life and the net present value of the $5 million difference between the two outcomes is approximately $0.

Good luck.