A standard four-year founder vesting schedule is meant to align incentives, but it can also leave a startup carrying "dead weight" on its cap table. According to a Crunchbase guest article by David Siegel, a partner at Grellas Shah LLP, founders who depart before their vesting completes can retain large equity positions that were never earned through continued contribution.
Those orphaned shares can create real operational problems. Later financing rounds and board control decisions become harder to manage when a former founder still holds a significant stake. In some cases, startups resort to litigation to try to reclaim the shares, which is costly and distracting.
Siegel suggests that startups can avoid this trap by using carefully drafted repurchase agreements and making vesting terms explicit from the start. The goal is to ensure that equity stays tied to active contribution, rather than becoming a source of conflict after a founder leaves.