How reverse vesting works in a Dutch BV
Founders hold their shares from the start, often through personal holding companies (see the holding structure for startups). The shareholders’ agreement and the articles then include a repurchase right. Anyone who leaves before the end of the schedule must offer back the unvested part. The usual schedule is four years with a one-year cliff. If the right is used, the shares are transferred back through the notary. The clauses are therefore drafted to notarial standard from the start.
Pricing for good leavers and bad leavers
With a price for each case, the split is fair. A good leaver, such as someone who becomes ill or leaves by agreement, keeps the vested shares. They offer back the unvested shares at fair value or at cost. A bad leaver offers back a larger part at nominal value or at cost. Examples are someone dismissed for cause or someone who leaves during the cliff period. Agree these definitions while everyone still gets on, because the clause only applies once someone leaves.
Do you want to set up a Dutch BV from abroad? See setting up a BV in the Netherlands for the costs, the steps and the timeline. We arrange the notary and the KVK registration for you.
Why investors check it first
Investors are reluctant to invest when a departed co-founder still owns 25% of the company. In the term sheet, investors usually require vesting, and they often restart the vesting schedule at the round. See the readiness checklist. Employees get the same protection through the option pool. See the STAK. If shares are too heavy an instrument, phantom shares are a lighter alternative.