There is no such thing as founder stock. Three founders incorporate, the shares are split equally, and nobody talks about restrictions. In month six one of them takes a job elsewhere. The other two keep building. The departing founder stays exactly where they were in the share ledger (pay defteri) and rides the next funding round at the same multiple as everyone else. Legally the picture is flawless — which is why it is dangerous.
Founders dividing equity tend to assume the company has a separate class called “founder stock”: something stronger, reserved for them. No such category exists. What a founder holds is an ordinary share; what turns it into founder equity is not the share but the restrictions written over it by contract. Without them, being a founder is a fact about the past, not a continuing obligation towards the company.
The mistake starts right here. Shares are issued at incorporation and the restrictions postponed on the assumption that investors will sort it out anyway. What is postponed does not get drafted later; it gets negotiated, and the negotiation now depends on the consent of a founder who already holds the shares. That is the practical reason a co-founder agreement belongs to the first few weeks.
What actually makes a share a founder’s share?
You cannot stamp the word “founder” on a share and expect a legal consequence. What sets founder equity apart is a package of restrictions laid over that same ordinary share: the shares are earned against a schedule, the unearned portion can be bought back on departure, they cannot be transferred freely to outsiders, and everything the founder creates for the business has been assigned to the company.
The last of these is the one that gets skipped. In Turkey founders start writing code and registering the brand and domain months before the company exists, and those assets stay with whoever created them unless something says otherwise. Discovering during due diligence that the company does not own its own product means a departing founder walks away holding its core. The restriction package and the intellectual property assignment belong to the same signing day.
The conversation an equal split avoids
Dividing the equity equally looks like an expression of mutual respect. More often it is the polite name for avoiding a hard conversation: who is contributing what, and from when. The distance between having an idea and turning it into something people will pay for is far longer than founders estimate on incorporation day, and an equal split reflects that day’s feeling rather than that distance.
These are the items worth keeping separate in the conversation:
- The idea and the work done before incorporation. A prototype someone has been building for months is a real contribution, but it is not measured in the same currency as effort still to come.
- The date each founder goes full time. This is the item that distorts splits most: if one founder leaves a salaried job on day one while another stays in employment, the two did not start together in any meaningful sense.
- Cash and personal risk. Putting up capital, giving a personal guarantee or working unpaid is distinct from labour, and can be documented as a receivable rather than converted into equity.
- Role and staying power. Who runs the company, who owns product and who owns revenue describes the load of the coming years, not today’s contribution.
The same logic governs a founder who joins late. Somebody arriving well after incorporation may carry the founder title, but their vesting schedule should run from their own start date, not the incorporation date. Showing that as one line on the capitalisation table saves a long explanation in later rounds.
How does reverse vesting make a split correctable?
Reverse vesting takes its name from the direction of travel. Under employee options shares are handed over gradually; a founder receives the whole holding on day one, subject to a repurchase right in favour of the company that erodes over time. The founder votes from the outset, takes dividends and appears in the share ledger as a full owner; in exchange, an early departure sends the unearned portion back.
Two settings inside the schedule matter. The first is the cliff: nothing vests until an initial period has run, so a founder who leaves very early earns nothing. The second is the repurchase price. If the price for unvested shares is not fixed in advance, the departure turns into a valuation argument and the mechanism stops working. None of these periods is a legal requirement — they are negotiated, and as a matter of market practice investors tend to press for founder schedules to restart alongside a financing round.
The manner of the departure
Reverse vesting on its own answers only how much. Why is answered by the good leaver / bad leaver distinction, and that is what completes the split. A founder who leaves over illness, family circumstances or a joint decision has no business being treated like one dismissed for carrying the company’s secrets to a competitor.
The distinction bites at two points: whether vested shares are also subject to repurchase, and whether the price is calculated at fair value or at nominal value. The first real argument is about the breadth of the bad leaver definition. Drafting that hangs it on a discretionary test such as “unsatisfactory performance” hands whoever controls the majority a route to strip a founder of their holding; confining it to concrete, provable circumstances — deliberate harm, breach of confidentiality, breach of a non-compete, a final criminal conviction — is safer for everyone.
The documents these restrictions belong in
In a Turkish joint stock company (anonim şirket) the package sits across three layers. The articles of association (esas sözleşme) can be drafted only within the room the statute allows — the principle of mandatory provisions draws that boundary — and take effect against the company itself. A shareholders’ agreement (pay sahipleri sözleşmesi) lives in the law of obligations: it binds the parties and breach can be backed by damages and liquidated sums, but it does not by itself invalidate a transfer to a third party. The share ledger is where both layers become visible, and a company with no records has nothing to rely on when a founder leaves.
On transfers the operative source is the restriction regime of the Turkish Commercial Code (Türk Ticaret Kanunu, Law No. 6102). Article 492 allows the transfer of registered shares to be restricted through the articles. Article 493 sets out when an unlisted company may refuse approval. Under article 493/1 the company must either rely on an important reason stated in the articles or offer to acquire the shares at real value. Article 493/2 ties that reason to the composition of the shareholder body and the company’s field of activity. Where shares pass by inheritance, division of an estate, the matrimonial property regime or enforcement proceedings, article 493/4 leaves the company only the route of offering to acquire at real value. This is what makes it hard for a departing founder to sell to whomever they like, but only if a restriction clause went into the articles.
In a limited liability company (limited şirket) the position is tighter: under article 595 a transfer is as a rule subject to the approval of the general assembly (genel kurul). That makes founder restrictions easier to enforce, at the cost of flexibility in the ownership structure and in the instruments you can offer an investor. If an institutional round is coming, the conversion is worth discussing early.
What a founder holding restricted stock in the US must not miss
When the team incorporates in Delaware, or places a US parent above the Turkish company, reverse vesting is documented there as restricted stock. The critical detail under US tax law is this: unless the founder makes an 83(b) election within 30 days of the transfer of the shares, the taxable moment is spread across each vesting instalment, so a rising valuation means the founder is taxed on their own shares against a growing base. The deadline runs from the transfer and a missed one cannot be repaired.
For a founder sitting in Turkey this lands in two places. One is chronology: if the dates of incorporation, share transfer and restriction agreement have been allowed to blur, when the 30-day period started becomes arguable, so those dates must be unambiguous in the documents. The other is that a US election does not settle the Turkish side — a founder resident in Turkey has separate obligations here. Teams that plan only one jurisdiction at signing usually find only one can be fixed afterwards.
A split is made once; reverse vesting spreads it over time and makes it correctable. The energy of that first conversation is better spent on the restrictions than on the numbers: build the vesting schedule around when each person actually started, fix the repurchase price and the circumstances in which a founder’s holding is cut short, put the transfer restriction into the articles, and assign the intellectual property on the same day. Once that is written down, the division itself becomes easier to discuss — it is no longer an irreversible decision but an assumption that time will confirm.
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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Incorporation, founder agreements, ESOP, term sheets, regulatory matters.
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Delaware C-Corp, flip-up structures, SAFE/convertible notes, 83(b).
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