One of three founders decides to leave in the middle of year two. They wrote most of the first version of the product; but a five-year road lies ahead, and they will no longer be carrying it. You look at the cap table: their 30% stake sits there, attached to no condition whatsoever. The departing founder will contribute no further work, yet has become a ghost shareholder who will resist dilution at every round and whose signature will be needed at every critical decision. The contractual antidote to this picture is the good leaver / bad leaver construction: a set of clauses that prices, in advance, what happens to a leaver’s shares according to the character of the departure.
This is not about assuming bad faith. Nobody plans an ugly exit at incorporation; but the statistics are unkind, and a founding team that stays intact until exit day is the exception. The break-up disputes we see share one feature: the departure clauses were either never written, or never read until the day of the crisis. And a cap table burdened by unconditioned founder shares is one of the most reliable ways to make a company uninvestable.
A leaver clause answers a single question: who leaves what, at what price?
The logic of the leaver mechanism is simple: founder equity is as much payment for future work as reward for past contribution. If the work ends, the payment has to be recalculated. The mechanism performs that calculation along two axes: the character of the departure (good or bad) and the portion of the shares vested by the date of departure. At the intersection of the two axes you read off which shares can be bought back, and at what price. A well-built leaver clause leaves almost nothing to negotiate on the day of departure; where the clause is badly built or absent, everything is negotiated that day, at the tensest table imaginable.
Definitions: the line between good and bad is the heart of the negotiation
The core of the good leaver definition is relatively uncontroversial: death, permanent incapacity, compelling health grounds, or the company terminating the founder’s engagement without just cause. The bad leaver core is equally settled: removal for just cause, breach of non-compete or confidentiality obligations, abuse of office. The real battle is fought in the grey zone: which box holds the founder who leaves without wronging anyone — simply exhausted, or wanting a different life?
We see three approaches in practice. Harsh structures treat every early departure without cause as a bad leaver event; this chains the founder to the company, but ignores the cost of keeping a demotivated partner inside. Soft structures reserve bad leaver treatment for serious breaches only; that makes early departure almost costless. Balanced structures recognise an intermediate category — an early voluntary departure is treated as neither good nor bad but “middling”: vested shares change hands at a reasonable price, unvested shares in full at a token price. Which model is right depends on the team; the invariable rule is that whoever holds the drafting pen holds the advantage, so the definitions should be negotiated consciously between the founders, not copied from an investor’s template.
Without vesting, a leaver clause limps
The load-bearing column of the leaver construction is the vesting schedule. Because Turkish founders receive their shares in full ownership at incorporation, the mechanism is usually built as reverse vesting: the founder owns all the shares, but consents in advance to the buy-back of the portion not yet “earned” if they leave early. Market convention spreads vesting over several years with a cliff period at the start; the schedule and proportions are tuned to the founder’s tenure and the company’s stage.
Leaver definitions and the vesting timetable work as a pair: a good leaver generally keeps what has vested, and the argument is confined to the unvested portion; a bad leaver may, depending on the design, lose part or even all of the vested shares too. The architecture is renegotiated at financing rounds — investors frequently ask for partially completed schedules to be extended or restarted. The intersection with acceleration provisions in exit scenarios must also be drafted from the outset; otherwise, when the company is sold, the leaver clause and the acceleration clause say different things about the same shares.
Price formulas: nominal value, fair value and the discount factor
The second axis is price, and the typical matrix is built like this. Unvested shares are bought back at nominal or token value regardless of how the departure is classified; the logic is that the work those shares were meant to pay for was never performed. A good leaver’s vested shares are priced at fair value: the valuation of the last financing round, a determination by an independent valuer, or a pre-agreed formula serves as the reference. For a bad leaver’s vested shares, formulas range from a discount on fair value down to nominal value.
Two design warnings matter. First, payment mechanics are as critical as price: an early-stage company has no buy-back money in its account, so instalments, deferral, or the other shareholders stepping in as buyers must be planned from the start. Second, the risk of excess: formulas so harsh that even vested shares go for a token price may face a fairness review similar to the scrutiny applied to contractual penalties; the good-faith and morality limits of general contract law circulate here as well. The line between deterrence and confiscation is drawn at the moment the formula is written.
The limits of the TCC and the contractual toolkit
When the construction is brought down into Turkish law, the first wall it hits is this: a joint-stock company is not free to acquire its own shares. Under Article 379 of the TCC, a company may not, as a rule, acquire its own shares beyond 10% of its capital, and even that acquisition is subject to further conditions. The sentence “the company buys back the leaver’s shares” therefore often cannot be performed as written in Türkiye. In practice the buy-back right is granted not to the company but to the remaining founders and the investors; the engine of the mechanism is a call option written into the shareholders’ agreement, accompanied by an undertaking to transfer the shares.
For security of performance, the contractual layer is reinforced at the corporate level: the share transfer restrictions available under the TCC, which allow transfers of registered shares to be conditioned on company approval, are built into the articles; holding share certificates or signed transfer documents in escrow, contractual penalties and temporary arrangements on voting rights harden the mechanism further. The aim is to make the departing founder’s position of “I’ll breach the contract — sue me, it will take years” worthless from day one.
Pulling it together: the leaver construction is the discipline of writing down, in advance, the classification of a departure, its price and its performance mechanics. Negotiate the definitions with the grey zone in view, tie the mechanism to a reverse vesting timetable, build the price matrix with enough proportionality to survive a fairness review, and structure the buy-back so it never collides with the TCC’s limits: through the shareholders rather than the company, supported by options and the articles. Where these four steps have been taken, a founder departure is painful but manageable; where they have not, the same departure becomes a weight the company carries on its cap table for years.
Sources. Turkish Commercial Code No. 6102 and Turkish Code of Obligations No. 6098. Statute links open the official Turkish texts on mevzuat.gov.tr.
This article is provided for general information only and does not constitute legal advice. Please seek legal support for an assessment of any specific matter.
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