Startup Acquisition (Equity+Cash) Structuring

[Ravindhran]

Here is a question I am confused about. Say a startup is being acquired for dual interests: a) the product. b) recruit team members

Say: > Startup gets valued @ X. (for the company & recruiting team) > The amount is paid out in cash (A) + stock swap(B): A + B = X.

I am assuming that the stock swap (B) will come some vesting schedule of 4 years or similar. So the team members will earn their shares over 4 years of employment etc.

Question: Say a member of the team holds 10% equity in Startup, if vesting is fully accelerated. However the member is not going to join the acquirer.

Is the member entitled to 10% of X? Or 10% of A? - It seems to me that 10% of X would be unfair, because the person is not joining the company & will not be working for those shares. While others will need to earn those shares through employment. - whereas, 10% of A sounds tricky -> because if the entire deal is a stock swap only & no cash -> then the member gets 0.

[h4t]

You still end up with the contract with the right to exercise the contract for the stock from the vesting date until the expiry. You can sell a contract at any time before the expiry date or you may exercise at anytime after the vesting date up until the expiry. Here is a good link for you that might be a good place to start: https://www.thebalance.com/understanding-your-employee-stock...

[Ravindhran]

My question is different: How do the team members who will not join the acquirer get compensated?