Define Equity Success Criteria and Risk Triggers
Establish quantitative and qualitative indicators of a healthy founder equity structure, alongside early warning signals of team misalignment or structural risk. Define exact triggers for mandatory renegotiation, mediation, or good-leaver and bad-leaver provisions.
Completing this action installs objective guardrails that protect the venture against co-founder deadlock, underperformance, or messy equity disputes. It provides pre-agreed mechanisms to resolve team friction before it imperils company survival.
The founder must produce a completed Governance Risk Framework defining specific good-leaver and bad-leaver triggers, performance expectations, and deadlock resolution mechanisms, integrated into an explicit founder alignment agreement.
Five questions an expert would ask when reviewing your output
Use these to challenge assumptions, pressure-test your logic, and check the quality of this action's output in the context of the parent task and wider venture development.
- 1
What precise performance metrics or behavioural triggers define a bad leaver under this proposed governance framework?
- 2
Why did you select these specific deadlock resolution mechanisms over standard mediation or drag-along options?
- 3
How will the venture quantitatively track whether each founder is delivering against their agreed equity earn-in contributions?
- 4
What early risk trigger flags that a founder's dynamic contribution balance has drifted dangerously far from their fixed equity share?
- 5
How does this governance framework prevent a minority co-founder from blocking crucial future equity funding rounds?