Month: May 2025

If you’re building a startup with co-founders, this is one of the most important (and least glamorous) agreements you’ll need to sign. The Founder’s Vesting Agreement defines how equity is earned—or retained—based on actual commitment to the company.

And yes, it will save you a lot of problems down the road.

What is vesting?

Vesting is a legal mechanism that conditions the acquisition—or retention—of shares on the person’s continued involvement with the startup for a set period. This ensures that shares are not granted upfront, but are earned over time and contribution.

It’s used both with co-founders and key employees. But in this post, we’ll focus on the founder-to-founder case, where the risk of future conflict is even greater if not addressed from the start.

Common elements of a vesting structure

1. Cliff (minimum commitment period): This is the initial period during which no shares are vested. If someone leaves before this time ends, they walk away with nothing. The standard is a 1-year cliff.
   
2. Schedule (vesting timeline): After the cliff, shares start vesting in periodic installments (monthly, quarterly, etc.) over a typical period of 4 years. For example:
   • Year 1: 0% (vesting starts only after completing the year)
   • Years 2–4: 1/36 monthly (or as agreed)
     
3. Triggers (accelerators): In certain events—such as a sale of the company (exit), merger, or acquisition—vesting can be accelerated. There are two types:
   • Single Trigger: vesting accelerates fully or partially with a specific event.
   • Double Trigger: requires two events, e.g., a sale and involuntary termination.

What is reverse vesting?

Reverse vesting is used when founders have already been issued shares. Instead of waiting to grant equity, in this case the founder agrees to return or forfeit part of their shares if they don’t stay for the agreed term.

It’s particularly useful when equity was assigned informally early on, before formalizing the startup’s legal structure. Reverse vesting helps clean up the cap table and protect both the team and future investors.

Why do you need a Founder’s Vesting Agreement?

• Because founders might leave… and take unearned equity with them.
• Because investors will require it: no one funds a team without long-term alignment.
• Because it prevents internal disputes (which can get very expensive).
• Because it aligns everyone’s incentives over time.
• Because it helps build a startup on solid, scalable foundations.

At Lawi, we draft Founder’s Vesting Agreements tailored to your startup’s stage, business model, and long-term vision. We also help you implement reverse vesting if equity has already been assigned and you need to get it properly regulated.

In an increasingly competitive ecosystem, startups that aim to scale and attract investors need to stand out not only through innovation, but also through legal robustness. During investment rounds, especially from the Seed or Series A stage, investors conduct rigorous audits — the famous due diligence. That’s where organization and protection of intangible assets become a major differentiator, as they demonstrate value and seriousness to potential investors.

The Value of Intellectual Property in Startups

APIs, algorithms, databases, images, texts, trademarks, and even the startup’s story are valuable assets. Often, these elements are at the heart of innovation. So how can you ensure these assets are protected against plagiarism, misuse, or future disputes? Beyond the National Institute of Industrial Property (INPI), the entity responsible for various intangible asset registrations in Brazil, there’s a modern, effective, and increasingly legally recognized tool: blockchain registration.

Blockchain as Proof of Authorship: Judicial Recognition and Security

The preservation of evidence via blockchain has gained traction in Brazil’s legal landscape. Multiple court rulings have acknowledged the evidentiary validity of these records, assigning them a value similar to that of a notarial deed. That is, technically solid evidence, with a timestamp, and virtually tamper-proof.

The major appeal? It is a process that is:

• Fast,
• Cost-effective,
• Secure, and
• Tech-savvy — perfectly aligned with the startup mindset.

The Role of Latin American Copyright Laws

It’s important to highlight that, according most of Latin American regulations, copyright is established upon creation of the work, regardless of registration. However, in legal disputes, registration can be a decisive advantage, serving as strong evidence of precedence and authorship. Registering certain content on blockchain can shield the startup from future claims or attempts of misappropriation by competitors or even former partners.

Some examples of intangible assets that can be protected via Blockchain include:

• Source code of APIs, for instance, which diverge from standard software registrations at INPI;
• AI-generated images,
• Advertising, literary and other general texts,
• Pitch deck presentations,
• Original business concepts.

In today’s environment, where legal security equates to credibility, being prepared could be what sets your startup apart in investors’ eyes. By adopting technologies like blockchain for copyright registration, your company conveys seriousness, innovation, and commitment to best practices.

To do this the right way, count on partners like Lawi. Beyond understanding your business, we know how to make it safer and more attractive, driving your growth.

Let’s go together!